filings.toolsItem 8. Financial Statements and Supplementary Data.
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Item 8. Financial Statements and Supplementary Data.
Hasbro, Inc.
Form 10-K
For the Year Ended December 28, 2025
Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors
Hasbro, Inc.:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Hasbro, Inc. and subsidiaries (the Company) as of December 28, 2025 and December 29, 2024, the related consolidated statements of operations, comprehensive earnings (loss), shareholders’ equity, and cash flows for each of the years in the three-year period ended December 28, 2025, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 28, 2025 and December 29, 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 28, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 28, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 25, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating these critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Evaluation of the sufficiency of audit evidence over royalty revenues and related contract assets and liabilities
As discussed in Note 1 to the consolidated financial statements, the Company enters into contracts to license its intellectual property wherein the licensees generally pay a sales-based royalty, usage-based royalty, or a combination of both, for use of the intellectual property. The Company records the sales-based or usage-based royalty revenues at the occurrence of the licensees’ subsequent sale or usage. As discussed in Note 2 to the consolidated financial statements, the Company records contract assets related to minimum guarantees being recorded in advance of the contractual invoicing, which are recognized ratably over the terms of the respective license periods. The Company may receive advanced royalty payments from licensees in advance of a licensees’ subsequent sale or usage, or prior to the completion of the Company's performance obligation, for which the Company records the deferred revenues as contract liabilities. As of December 28, 2025, the Company recognized $4,701.3 million of net revenues, a portion of which related to royalty revenues. At
December 28, 2025, the Company recorded contract assets and liabilities balances of $282.9 million and $190.5 million, respectively, a portion of each which related to licenses.
We identified the evaluation of the sufficiency of audit evidence over royalty revenues and the related contract assets and liabilities as a critical audit matter. Subjective auditor judgment was required to evaluate the nature and extent of procedures performed over royalty revenues and the related contract assets and liabilities because the Company uses a combination of manual and automated procedures to initiate, process, and record these transactions, including multiple information technology (IT) applications. IT professionals with specialized skills and knowledge were also required to evaluate the IT environment in the royalty revenue process.
The following are the primary procedures we performed to address this critical audit matter. We applied auditor judgment to determine the nature and extent of procedures to be performed over royalty revenues and the related contract assets and liabilities. We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s royalty revenues and related contract assets and liabilities process, including certain manual and automated controls related to initiating, processing, and recording of these transactions. We involved IT professionals with specialized skills and knowledge, who assisted in testing certain general IT controls and application controls used by the Company to process and record royalty revenues. On a sample basis, we tested royalty revenue transactions, contract assets, and contract liabilities by comparing the recorded amounts to underlying documentation and third-party evidence, including customer contracts, sales and usage statements, invoices, and cash receipts. We evaluated the overall sufficiency of audit evidence obtained by assessing the results of procedures performed, including the appropriateness of the nature and extent of such evidence.
Valuation of the North America Consumer Products reporting unit
As discussed in Notes 1 and 8 to the consolidated financial statements, the Company assesses goodwill and other intangible assets with indefinite lives at least annually, or more frequently if an event occurs or circumstances change that indicate the carrying value of a reporting unit may not be recoverable. During the second quarter of 2025, the Company noted downward revisions to operating income and cash flow forecasts for certain reporting units, including North America, within the Consumer Products segment and performed an interim quantitative impairment test. The fair value of the North America Consumer Products reporting unit was determined considering a discounted cash flow model which is primarily based on management's future revenue and cost estimates, which included the estimated impact of tariff policies in effect and the related macroeconomic environment, and a discount rate. As such, the Company recognized an impairment charge of $1,021.9 million, a portion of which related to the North America Consumer Products reporting unit.
We identified the evaluation of the fair value of the North America Consumer Products reporting unit as a critical audit matter. A high degree of subjective auditor judgment was required to evaluate the key assumptions, including the projected net revenue, projected product cost, discount rate, tariff percentage, and tariff percentage probability assumptions, used to estimate fair value for the reporting unit. The assessment of these key assumptions was subjective as they are based largely on the outcome of uncertain future events and changes could have a significant impact on the fair value of the reporting unit. In addition, specialized skills and knowledge were required to assess the discount rate, tariff percentage, and tariff percentage probability assumptions.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s goodwill impairment process. This included controls related to the development of the key assumptions used to estimate fair value of the North America Consumer Products reporting unit. We evaluated the reasonableness of projected net revenue and projected product cost for the reporting unit by comparing them to the Company's historical performance, available external industry data, and other internal information. We evaluated the reasonableness of the tariff percentage and tariff percentage probability for the reporting unit by comparing them to available external industry data. We involved a trade and customs professional with specialized skills and knowledge who assisted in evaluating the tariff percentage and tariff percentage probability by informing our understanding of tariff-related executive orders, the timelines of tariff-related events, and the likelihood of each tariff percentage, including providing external information on the key assumptions. We involved valuation professionals with specialized skills and knowledge, who assisted in:
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evaluating the discount rate by comparing it to a discount rate range that was independently developed using publicly available market data for guideline public companies
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evaluating the appropriateness of the selected guideline public companies by researching the selected guideline public companies and their business description
- developing an independent estimate of the fair value of the reporting unit using the income approach, which was then compared to the Company’s fair value estimate
/s/ KPMG LLP
We have not been able to determine the specific year that we began serving as the Company’s auditor, however, we are aware that we have served as the Company’s auditor since at least 1968.
Providence, Rhode Island
February 25, 2026
HASBRO, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
December 28, 2025 and December 29, 2024
(Millions of Dollars Except Share Data)
| 2025 | 2024 | ||||||||||
| ASSETS | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents, including restricted cash of $0.4 and $0.3 | $ | 776.6 | $ | 695.0 | |||||||
| Short-term investments | 105.4 | — | |||||||||
| Accounts receivable, net of allowance for credit losses of $61.3 and $25.8 | 1,059.8 | 919.8 | |||||||||
| Inventories | 259.8 | 274.2 | |||||||||
| Prepaid expenses and other current assets | 382.1 | 353.5 | |||||||||
| Total current assets | 2,583.7 | 2,242.5 | |||||||||
| Property, plant and equipment, net | 247.8 | 302.6 | |||||||||
| Goodwill | 1,256.7 | 2,278.2 | |||||||||
| Other intangible assets, net | 456.7 | 518.4 | |||||||||
| Other assets | 1,007.1 | 998.6 | |||||||||
| Total assets | $ | 5,552.0 | $ | 6,340.3 | |||||||
| LIABILITIES, NONCONTROLLING INTERESTS AND SHAREHOLDERS’ EQUITY | |||||||||||
| Current liabilities | |||||||||||
| Current portion of long-term debt | $ | 497.0 | $ | — | |||||||
| Accounts payable | 335.4 | 341.5 | |||||||||
| Accrued liabilities | 1,038.7 | 1,059.8 | |||||||||
| Total current liabilities | 1,871.1 | 1,401.3 | |||||||||
| Long-term debt | 2,767.9 | 3,380.8 | |||||||||
| Other liabilities | 347.5 | 373.2 | |||||||||
| Total liabilities | 4,986.5 | 5,155.3 | |||||||||
| Commitments and contingencies (Note 21) | |||||||||||
| Shareholders’ equity | |||||||||||
| Preference stock of $2.50 par value. Authorized 5,000,000 shares; none issued | — | — | |||||||||
| Common stock of $0.50 par value. Authorized 600,000,000 shares; issued 220,286,736 shares as of 2025 and 2024 | 110.1 | 110.1 | |||||||||
| Additional paid-in capital | 2,695.4 | 2,632.2 | |||||||||
| Retained earnings | 1,554.1 | 2,274.2 | |||||||||
| Accumulated other comprehensive loss | (217.5) | (246.4) | |||||||||
| Treasury stock, at cost, 79,901,615 shares in 2025 and 80,758,045 shares in 2024 | (3,603.6) | (3,612.5) | |||||||||
| Noncontrolling interests | 27.0 | 27.4 | |||||||||
| Total shareholders’ equity | 565.5 | 1,185.0 | |||||||||
| Total liabilities, noncontrolling interests and shareholders’ equity | $ | 5,552.0 | $ | 6,340.3 |
See accompanying notes to consolidated financial statements.
HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
Fiscal Years Ended in December
(Millions of Dollars Except Per Share Data)
| 2025 | 2024 | 2023 | |||||||||||||||
| Net revenues | $ | 4,701.3 | $ | 4,135.5 | $ | 5,003.3 | |||||||||||
| Costs and expenses | |||||||||||||||||
| Cost of sales | 1,296.2 | 1,179.5 | 1,706.0 | ||||||||||||||
| Program cost amortization | 35.8 | 49.3 | 448.9 | ||||||||||||||
| Royalties | 368.9 | 284.2 | 428.3 | ||||||||||||||
| Product development | 385.6 | 294.1 | 306.9 | ||||||||||||||
| Advertising | 316.9 | 319.5 | 358.4 | ||||||||||||||
| Amortization of intangible assets | 66.0 | 68.3 | 83.0 | ||||||||||||||
| Impairment of goodwill (Note 8) | 1,021.9 | — | 1,191.2 | ||||||||||||||
| Loss on disposal of business | 25.0 | 37.4 | 539.0 | ||||||||||||||
| Selling, distribution and administration | 1,173.9 | 1,213.2 | 1,480.4 | ||||||||||||||
| Total costs and expenses | 4,690.2 | 3,445.5 | 6,542.1 | ||||||||||||||
| Operating profit (loss) | 11.1 | 690.0 | (1,538.8) | ||||||||||||||
| Non-operating expense | |||||||||||||||||
| Interest expense | 163.4 | 171.2 | 186.3 | ||||||||||||||
| Interest income | (28.6) | (47.3) | (23.0) | ||||||||||||||
| Other (income) expense, net | (21.7) | 69.1 | 7.0 | ||||||||||||||
| Total non-operating expense, net | 113.1 | 193.0 | 170.3 | ||||||||||||||
| (Loss) earnings before income taxes | (102.0) | 497.0 | (1,709.1) | ||||||||||||||
| Income tax expense (benefit) | 216.2 | 102.6 | (221.3) | ||||||||||||||
| Net (loss) earnings | (318.2) | 394.4 | (1,487.8) | ||||||||||||||
| Net earnings attributable to noncontrolling interests | 4.2 | 8.8 | 1.5 | ||||||||||||||
| Net (loss) earnings attributable to Hasbro, Inc. | $ | (322.4) | $ | 385.6 | $ | (1,489.3) | |||||||||||
| Net (loss) earnings per common share: | |||||||||||||||||
| Basic | $ | (2.30) | $ | 2.77 | $ | (10.73) | |||||||||||
| Diluted | $ | (2.30) | $ | 2.75 | $ | (10.73) | |||||||||||
| Cash dividends declared | $ | 2.80 | $ | 2.10 | $ | 2.80 |
See accompanying notes to consolidated financial statements.
HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Earnings (Loss)
Fiscal Years Ended in December
(Millions of Dollars)
| 2025 | 2024 | 2023 | |||||||||||||||
| Net (loss) earnings | $ | (318.2) | $ | 394.4 | $ | (1,487.8) | |||||||||||
| Other comprehensive earnings (loss): | |||||||||||||||||
| Foreign currency translation adjustments | 40.1 | (48.8) | 59.4 | ||||||||||||||
| Net (losses) gains on hedging activities, net of tax | (12.5) | 7.3 | (8.6) | ||||||||||||||
| Changes in unrecognized pension amounts, net of tax | 0.6 | (2.9) | (0.9) | ||||||||||||||
| Reclassifications to earnings, net of tax: | |||||||||||||||||
| Net losses on hedging activities | 0.5 | 0.4 | 3.8 | ||||||||||||||
| Amortization of unrecognized pension and postretirement amounts | 0.2 | (0.9) | (0.3) | ||||||||||||||
| Other comprehensive earnings (loss), net of tax | 28.9 | (44.9) | 53.4 | ||||||||||||||
| Total comprehensive (loss) earnings, net of tax | (289.3) | 349.5 | (1,434.4) | ||||||||||||||
| Total comprehensive earnings attributable to noncontrolling interests | 4.2 | 8.8 | 1.5 | ||||||||||||||
| Total comprehensive (loss) earnings attributable to Hasbro, Inc. | $ | (293.5) | $ | 340.7 | $ | (1,435.9) |
See accompanying notes to consolidated financial statements.
HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Fiscal Years Ended in December
(Millions of Dollars)
| 2025 | 2024 | 2023 | |||||||||||||||
| Cash flows from operating activities: | |||||||||||||||||
| Net (loss) earnings | $ | (318.2) | $ | 394.4 | $ | (1,487.8) | |||||||||||
| Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||||||||||||
| Depreciation of property, plant and equipment | 69.5 | 94.7 | 127.7 | ||||||||||||||
| Loss on disposal of business | 25.0 | 37.4 | 539.0 | ||||||||||||||
| Impairment of goodwill | 1,021.9 | — | 1,191.2 | ||||||||||||||
| Impairment of intangibles and production assets | — | — | 116.0 | ||||||||||||||
| Loss on Discovery Family Channel investment | — | 78.2 | — | ||||||||||||||
| Inventory obsolescence | 49.3 | 22.4 | 91.2 | ||||||||||||||
| Amortization of intangible assets | 66.0 | 68.3 | 83.0 | ||||||||||||||
| Program cost amortization | 35.8 | 49.3 | 448.9 | ||||||||||||||
| Deferred income taxes | 158.3 | (20.6) | (243.5) | ||||||||||||||
| Share-based compensation | 80.4 | 50.8 | 72.4 | ||||||||||||||
| Other non-cash items | 25.5 | 13.0 | (6.1) | ||||||||||||||
| Changes in operating assets and liabilities, net of acquired and disposed balances: | |||||||||||||||||
| Net change in accounts receivable | (150.2) | 77.3 | 15.5 | ||||||||||||||
| Net change in inventories | (25.4) | 22.1 | 257.1 | ||||||||||||||
| Net change in prepaid expenses and other current assets | (40.7) | 58.9 | 34.7 | ||||||||||||||
| Program production costs | (10.2) | (25.3) | (408.0) | ||||||||||||||
| Net change in accounts payable and accrued liabilities | (35.1) | (78.8) | (109.7) | ||||||||||||||
| Change in net deemed repatriation tax | (57.4) | (45.9) | (34.4) | ||||||||||||||
| Other | (1.3) | 51.2 | 38.4 | ||||||||||||||
| Net cash provided by operating activities | 893.2 | 847.4 | 725.6 | ||||||||||||||
| Cash flows from investing activities: | |||||||||||||||||
| Additions to property, plant and equipment | (63.3) | (87.2) | (135.5) | ||||||||||||||
| Additions to software development | (135.0) | (110.3) | (73.8) | ||||||||||||||
| Net (settlement) proceeds from sale of business, net of cash transferred | — | (12.0) | 329.6 | ||||||||||||||
| Purchase of investments | (105.4) | (571.0) | — | ||||||||||||||
| Maturity of investments | — | 583.0 | — | ||||||||||||||
| Other | 19.3 | (6.2) | (2.7) | ||||||||||||||
| Net cash (utilized) provided by investing activities | (284.4) | (203.7) | 117.6 | ||||||||||||||
| Cash flows from financing activities: | |||||||||||||||||
| Proceeds from borrowings | — | 498.6 | 2.6 | ||||||||||||||
| Repayments of borrowings | (118.2) | (581.3) | (359.6) | ||||||||||||||
| Net repayments of other short-term borrowings | — | — | (41.6) | ||||||||||||||
| Share-based compensation transactions | 9.6 | 7.6 | — | ||||||||||||||
| Dividends paid | (392.5) | (389.9) | (388.0) | ||||||||||||||
| Payments related to tax withholding for share-based compensation | (23.7) | (14.4) | (16.8) | ||||||||||||||
| Payment of financing costs | — | (5.3) | — | ||||||||||||||
| Other | (6.5) | (12.8) | (14.7) | ||||||||||||||
| Net cash utilized by financing activities | (531.3) | (497.5) | (818.1) | ||||||||||||||
| Effect of exchange rate changes on cash | 4.1 | 3.4 | 7.2 | ||||||||||||||
| Net increase in cash, cash equivalents and restricted cash | 81.6 | 149.6 | 32.3 | ||||||||||||||
| Cash, cash equivalents and restricted cash, beginning of year | 695.0 | 545.4 | 513.1 | ||||||||||||||
| Cash, cash equivalents and restricted cash, end of year | $ | 776.6 | $ | 695.0 | $ | 545.4 | |||||||||||
| Supplemental information | |||||||||||||||||
| Interest paid | $ | 158.4 | $ | 162.2 | $ | 179.0 | |||||||||||
| Income taxes paid, net | $ | 196.8 | $ | 92.7 | $ | 119.8 |
See accompanying notes to consolidated financial statements.
HASBRO, INC. AND SUBSIDIARIES
Consolidated Statements of Shareholders’ Equity
(Millions of Dollars)
| Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Non-controlling Interests | Total Shareholders’ Equity | ||||||||||||||||||||||||||||||||||||||||||||
| Balance, December 25, 2022 | $ | 110.1 | $ | 2,540.6 | $ | 4,071.4 | $ | (254.9) | $ | (3,634.4) | $ | 29.1 | $ | 2,861.9 | ||||||||||||||||||||||||||||||||||||
| Net (loss) earnings | — | — | (1,489.3) | — | — | 1.5 | (1,487.8) | |||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive earnings | — | — | — | 53.4 | — | — | 53.4 | |||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation transactions | — | (23.1) | — | — | 6.2 | — | (16.9) | |||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense | — | 69.9 | — | — | 2.5 | — | 72.4 | |||||||||||||||||||||||||||||||||||||||||||
| Dividends declared | — | 5.3 | (393.7) | — | — | — | (388.4) | |||||||||||||||||||||||||||||||||||||||||||
| Distribution paid to noncontrolling owners and other foreign exchange | — | — | — | — | — | (5.5) | (5.5) | |||||||||||||||||||||||||||||||||||||||||||
| Buyout of redeemable noncontrolling interest | — | (2.1) | — | — | — | — | (2.1) | |||||||||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2023 | 110.1 | 2,590.6 | 2,188.4 | (201.5) | (3,625.7) | 25.1 | 1,087.0 | |||||||||||||||||||||||||||||||||||||||||||
| Net earnings | — | — | 385.6 | — | — | 8.8 | 394.4 | |||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | — | — | — | (44.9) | — | — | (44.9) | |||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation transactions | — | (14.7) | — | — | 11.6 | — | (3.1) | |||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense | — | 49.2 | — | — | 1.6 | — | 50.8 | |||||||||||||||||||||||||||||||||||||||||||
| Dividends declared | — | 7.1 | (299.8) | — | — | — | (292.7) | |||||||||||||||||||||||||||||||||||||||||||
| Distributions paid to noncontrolling owners and other foreign exchange | — | — | — | — | — | (6.5) | (6.5) | |||||||||||||||||||||||||||||||||||||||||||
| Balance, December 29, 2024 | 110.1 | 2,632.2 | 2,274.2 | (246.4) | (3,612.5) | 27.4 | 1,185.0 | |||||||||||||||||||||||||||||||||||||||||||
| Net (loss) earnings | — | — | (322.4) | — | — | 4.2 | (318.2) | |||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive earnings | — | — | — | 28.9 | — | — | 28.9 | |||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation transactions | — | (22.0) | — | — | 8.5 | — | (13.5) | |||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense | — | 80.0 | — | — | 0.4 | — | 80.4 | |||||||||||||||||||||||||||||||||||||||||||
| Dividends declared | — | 5.2 | (397.7) | — | — | — | (392.5) | |||||||||||||||||||||||||||||||||||||||||||
| Distributions paid to noncontrolling owners and other foreign exchange | — | — | — | — | — | (4.6) | (4.6) | |||||||||||||||||||||||||||||||||||||||||||
| Balance, December 28, 2025 | $ | 110.1 | $ | 2,695.4 | $ | 1,554.1 | $ | (217.5) | $ | (3,603.6) | $ | 27.0 | $ | 565.5 |
See accompanying notes to consolidated financial statements.
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(1) Summary of Significant Accounting Policies
Overview: Hasbro, Inc., a Rhode Island corporation, and its consolidated subsidiaries are referred to in these consolidated financial statements and notes as “we,” “our,” “us,” the “Company” or “Hasbro.”
The Company's three reportable segments consist of: Consumer Products, Wizards of the Coast and Digital Gaming, and Entertainment. Corporate and Other, which does not meet the criteria to be an operating segment, provides management and administrative services to the Company's principal reporting segments.
Principles of Consolidation: The consolidated financial statements include the accounts of Hasbro, Inc. and all majority-owned subsidiaries. Investments representing 20% to 50% ownership interests in other companies are accounted for using the equity method. For those majority-owned subsidiaries that are not 100% owned by Hasbro, the interests of the minority owners are accounted for as noncontrolling interests. All intercompany balances and transactions have been eliminated.
Basis of Presentation: Hasbro’s fiscal year ends on the last Sunday in December. The fiscal years ended December 28, 2025 and December 29, 2024 were fifty-two week periods. The fiscal year ended December 31, 2023 was a fifty-three week period. Certain amounts have been reclassified to conform to current year presentation.
Use of Estimates: The consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and necessarily include amounts based on estimates and assumptions by management. Actual results could differ from those amounts. Significant estimates include amounts for income taxes, litigation, valuation of goodwill and other long-term assets, and inventory and accounts receivable exposures.
Sale of Non-core Entertainment One Film and TV Business: On December 27, 2023, the Company completed the sale of its Entertainment One film and television business ("eOne Film and TV") to Lions Gate Entertainment Corp., Lions Gate Entertainment Inc. and Lions Gate International Motion Pictures S.à.r.l (collectively "Lionsgate"), pursuant to the terms of an Equity Purchase Agreement dated August 3, 2023. Refer to Note 3, Sale of Entertainment One Film and TV Business, for additional information.
Other Adjustments: During 2024, the Company corrected prior period errors associated with an $18.1 million benefit related to the reversal of share-based compensation expense for the Company's stock performance awards that should have been recorded during fiscal year 2023 (recorded in Selling, distribution and administration on the Consolidated Statements of Operations), a $31.1 million expense and associated liability related to historical environmental liabilities in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standard Codification ("ASC") Topic 410, Asset Retirement and Environmental Obligations (recorded in Selling, distribution and administration on the Consolidated Statements of Operations), and a $26.7 million benefit related to an over-accrual of vendor commitment liabilities (recorded in Cost of sales on the Consolidated Statements of Operations). The recording of these items was not considered to be material, individually or in the aggregate, to the Company's prior year consolidated financial statements.
Cash, Cash Equivalents and Restricted Cash: Cash and cash equivalents, including restricted cash, include all cash balances and highly liquid investments purchased with an initial maturity to the Company of three months or less.
Accounts Receivable and Allowance for Credit Losses: Accounts receivable represent amounts due from customers in the ordinary course of business and are recorded at the invoiced amount and do not bear interest. Receivables are presented net of allowances for credit losses in the Company’s accompanying Consolidated Balance Sheets. Credit is granted to customers predominantly on an unsecured basis. Credit limits and payment terms are established based on extensive evaluations made on an ongoing basis throughout the fiscal year with regard to the financial performance, cash generation, financing availability and liquidity status of each customer. The Company evaluates the collectability of its accounts receivable and determines the appropriate allowance for credit losses based on a combination of factors such as assessment of the business environment, customers’ financial condition, historical collection experience, accounts receivable aging, customer disputes and future expected losses. Refer to Note 2, Revenue Recognition, for additional information related to the allowance for credit losses.
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
Inventories: Inventories are valued at the lower of cost or net realizable value using the first-in, first-out method. Based upon a consideration of quantities on hand, actual and projected sales volume, anticipated product selling price and product lines planned to be discontinued, slow-moving and obsolete inventory is written down to its estimated net realizable value. As of December 28, 2025 and December 29, 2024, substantially all inventory is comprised of finished goods.
Equity Method Investment: For the Company’s equity method investments, only the Company’s investment in and amounts due to and from the equity method investment are included in the Consolidated Balance Sheets. The Company’s share of the equity method investment’s earnings (losses) are included in Other (income) expense, net in the Consolidated Statements of Operations, along with any cash distributions received in excess of the carrying value of the investment. Dividends, cash distributions, loans or other cash received from the equity method investment, additional cash investments or other cash paid to the investee are included in the Consolidated Statements of Cash Flows. The Company reviews its equity method investments for impairment on a periodic basis. If it has been determined that the fair value of the equity investment is less than its related carrying value and that this decline is other-than-temporary, the carrying value of the investment is adjusted downward to reflect these declines in value. Refer to Note 9, Equity Method Investment, for additional information.
Noncontrolling Interests: The financial results and position of noncontrolling interests in entities that meet the criteria for consolidation are included in their entirety in the Company’s Consolidated Statements of Operations and Consolidated Balance Sheets. The Company's remaining non-redeemable noncontrolling interests as of December 28, 2025 and December 29, 2024 includes the following:
| Name | Country of Incorporation | Ownership Interest | Proportion Held | Principal Activity | ||||||||||||||||||||||
| Astley Baker Davies Limited | England and Wales | Nonredeemable | 70% | Ownership of intellectual property | ||||||||||||||||||||||
Property, Plant and Equipment, Net: Property, plant and equipment, net are stated at cost less accumulated depreciation. Depreciation is computed using accelerated and straight-line methods to depreciate the cost of property, plant and equipment over their estimated useful lives. The principal lives, in years, used in determining depreciation rates of various assets are: land improvements 15 to 19, buildings and improvements 14 to 25 and machinery and equipment (including computer hardware and software) 3 to 12. Depreciation expense is classified in the Consolidated Statements of Operations based on the nature of the property and equipment being depreciated. Tools, dies and molds are depreciated over their useful lives, which is generally 3 years, using an accelerated method. The Company generally owns all tools, dies and molds related to its products. Refer to Note 6, Property, Plant and Equipment, for additional information.
Property, plant and equipment, net is reviewed for impairment whenever events or circumstances indicate the carrying value may not be recoverable. Recoverability is measured by a comparison of the carrying amount of the asset or related asset group to future undiscounted cash flows expected to be generated by the asset or asset group. If such assets are considered to be impaired, the impairment to be recognized would be measured by the amount by which the carrying value of the assets exceeds their fair value wherein the fair value is the appraised value. Furthermore, assets to be disposed of are carried at the lower of the net book value or their estimated fair value less disposal costs.
Software as a Service Arrangements: The Company incurs costs to implement software as a service arrangements that are hosted by third party vendors. Implementation costs associated with software as a service arrangements are capitalized when incurred during the application development phase. Amortization is calculated on a straight-line basis over the contractual term of the arrangement. Capitalized amounts related to such arrangements are recorded within Prepaid expense and other current assets and Other assets in the Consolidated Balance Sheets.
Software Development Costs: Capitalized software development costs include direct costs incurred for both internally developed titles as well as payments to third-party software developers under development agreements. Software development costs are capitalized within Other assets in the Company’s accompanying Consolidated Balance Sheets. Cash outflows associated with the capitalization of software development costs are presented as an investing activity in the Company's accompanying Consolidated Statement of Cash Flows. Substantially all of our capitalized software development costs are included within the Wizards of the Coast and Digital Gaming segment.
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
We capitalize internal software development costs (including specifically identifiable payroll expense and incentive compensation costs, as well as third-party production and other content costs), subsequent to establishing technological feasibility of a software title. Technological feasibility of a product includes the completion of both technical design documentation and game design documentation. Management exercises judgment to assess when technological feasibility has been established. For titles where proven technology exists, this may occur early in the development cycle. Technological feasibility is evaluated on a title-by-title basis. Prior to establishing technological feasibility of a title, any costs incurred by third-party developers are recorded as product development expenses.
We enter into agreements with third-party developers that require us to make payments for game development and production services. In exchange for our payments, we receive the exclusive publishing and distribution rights to the finished game title. Subsequent to establishing technological feasibility of a product, we capitalize all development and production service payments to third-party developers as software development costs. When we contract with third-party developers, we generally select those that have proven technology and experience in the genre of the software being developed, which often allows for the establishment of technological feasibility early in the development cycle.
The development of certain software titles qualify for government grants and tax incentives that are earned on qualified production spend. These grants and incentives either reduce the cost basis of our capitalized software development costs or product development expense, depending on if the associated titles have met the technological feasibility criteria.
Amortization of capitalized software development costs and licenses commence when a title is available for general release and is recorded on a title-by-title basis in Cost of sales in the Consolidated Statements of Operations. For capitalized software development costs, annual amortization is calculated using (1) the proportion of current year revenue to the total revenue expected to be recorded over the life of the title or (2) the straight-line method over the remaining estimated life of the title, whichever is greater. As of December 28, 2025, none of the titles for which we have capitalized software development costs have begun amortization.
We evaluate the future recoverability of capitalized software development costs on a quarterly basis. For titles that have been released to the general public, recoverability is primarily assessed based on the title's actual performance. For titles that are scheduled to be released in the future, recoverability is evaluated based on the expected performance of the specific titles to which the cost relates. We use a number of criteria in the evaluation of expected performance, including historical performance of comparable titles developed with comparable technology, market performance of comparable titles, orders for the title prior to its release, general market conditions, and past performance of the franchise. When we determine that capitalized costs of the title are unlikely to be recovered by product sales, an impairment of software development costs capitalized is charged in the period in which such determination is made. Refer to Note 7, Software Development Costs, for additional information.
Goodwill and Other Intangible Assets, Net: Goodwill results from acquisitions the Company has made over time. Substantially all of the Company's other intangible assets consist of the cost of acquired product rights. In establishing the value of such rights, the Company considers existing trademarks, copyrights, patents, license agreements and other product-related rights. These rights were valued on their acquisition dates based on the anticipated future cash flows from the underlying product lines. The Company also has certain intangible assets related to the Tonka and Milton Bradley acquisitions that have indefinite lives.
Goodwill and intangible assets deemed to have indefinite lives are not amortized and are tested for impairment at least annually. The annual goodwill test begins with a qualitative assessment, where qualitative factors and their impact on critical inputs are assessed to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If the Company determines that a reporting unit has an indication of impairment based on the qualitative assessment, a quantitative impairment assessment is performed.
The Company's intangible assets having definite lives are being amortized over remaining periods ranging from 2 to 12 years using the straight-line method. The Company reviews intangible assets with definite lives for impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. Recoverability is measured by a comparison of the carrying amount of the asset to future undiscounted cash flows expected to be generated by the asset or asset group. If such assets were considered to be impaired, the impairment to be recognized would be measured by the amount by which the carrying value of the assets exceeds their fair value wherein that fair value is determined based on discounted cash flows.
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
The Company's reporting units are determined in accordance with the provisions of ASC Topic 350, Intangibles - Goodwill and Other. The Company performs its annual impairment testing of goodwill and definite-lived intangible assets during the fourth quarter of each year. Refer to Note 8, Goodwill and Intangible Assets, for additional information on the results of the Company’s impairment tests.
Financial Instruments: Hasbro’s financial instruments include cash and cash equivalents, accounts receivable, short-term borrowings, accounts payable and certain accrued liabilities. As of December 28, 2025, the carrying cost of these instruments approximated their fair value. The Company’s financial instruments as of December 28, 2025 also include long-term borrowings (refer to Note 12, Long-Term Debt and Other Financing, for carrying cost and related fair values) as well as certain assets and liabilities measured at fair value (refer to Note 15, Fair Value of Financial Instruments and Note 19, Derivative Financial Instruments).
Revenue Recognition: Revenue is recognized when control of the promised goods is transferred to the customers or licensees, in an amount that reflects the consideration the Company expects to be entitled to in exchange for transferring those goods. The Company accounts for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability of consideration is probable.
The majority of the Company’s revenues are derived from sales of finished products to customers. Revenues from sales of finished products to customers accounted for 81%, 79% and 75% of the Company’s revenues for the fiscal years ended 2025, 2024 and 2023, respectively. When determining whether control of the finished products has transferred to the customer, the Company considers any future performance obligations. Generally, the Company has no post-shipment obligation on sales of finished products to customers and revenues from product sales are recognized upon passing of title to the customer, which is generally at the time of shipment but can vary based on international commerce terms ("incoterms"). Any shipping and handling activities that are performed by the Company, whether before or after a customer has obtained control of the products, are considered activities to fulfill our obligation to transfer the products, and are recorded as incurred within Selling, distribution, and administration expenses. The Company offers various discounts, rebates, allowances, returns, and markdowns to its customers (collectively, “allowances”), all of which are considered when determining the transaction price. Certain allowances are fixed and determinable at the time of sale and are recorded at the time of sale as a reduction to revenues. Other allowances can vary depending on future outcomes such as customer sales volume (“variable consideration”). The Company estimates the amount of variable consideration using the expected value method. In estimating the amount of variable consideration using the expected value method, the Company considers various factors including but not limited to: customer terms, historical experience, any expected deviations from historical experience, and existing or expected market conditions. The Company then records an estimate of variable consideration as a reduction to revenues at the time of sale. The Company adjusts its estimate of variable consideration at least quarterly or when facts and circumstances used in the estimation process may change. Historically, adjustments to estimated variable consideration have not been material.
The Company enters into contracts to license its intellectual property, which consists of its brands, in various channels including but not limited to: consumer products such as apparel or home goods, within formats such as online and digital games, within venues such as theme parks, or within formats such as television and film. The licensees generally pay the Company a sales-based royalty, usage-based royalty, or a combination of both, for use of the brands, in some cases subject to minimum guaranteed amounts or fixed fees. The license of the Company’s brands provide access to the intellectual property over the term of the license, generally without any other performance obligation of the Company other than keeping the intellectual property active, and is therefore considered a right-to-access license of symbolic intellectual property. The Company records sales-based or usage-based royalty revenues for right-to-access licenses at the occurrence of the licensees’ subsequent sale or usage. When the arrangement includes a minimum guarantee, the Company records the minimum guarantee on a ratable basis over the term of the license period and does not record the sales-based or usage-based royalty revenues until they exceed the minimum guarantee.
The Company also produces, sells and licenses television and film content for distribution to third parties in formats that include broadcast, digital streaming, transactional and theatrical. These are intellectual property licenses where the licensees pay either a fixed fee for the content license or a variable fee in the form of a sales-based royalty. The content that the Company delivers to its licensees typically has stand-alone functionality, generally without any other performance obligation of the Company, and is therefore considered a right-to-use license of functional intellectual property. The Company records revenues for right-to-use licenses once the license period has commenced and the
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
licensee has the ability to use the delivered content. In arrangements where the licensee pays the Company a fixed fee for multiple seasons or multiple series of programming, arrangement fees are recorded as revenues based upon their relative fair values. The Company also earns advertising revenues from certain content made available on free to consumer, streaming video on demand platforms where the Company earns a portion of the advertising revenues earned by the service provider. The performance obligation is met and revenue is recorded when the user accesses the Company’s content through the streaming platform.
The Company develops and hosts digital games featuring its brands within the games, such as Magic: The Gathering Arena and D&D Beyond. The Company does not charge a fee to the end users for the download of the games or the ability to play the games. The end users make in-application purchases of virtual currencies, with such purchased virtual currencies to be used in the games. In addition, the Company offers a subscription service that provides access to a variety of added benefits, typically for a recurring monthly, semi-annual, or annual fee. The Company records revenues from in-application purchases based on either the usage patterns of the players or the player’s estimated life, depending on the nature of the game item purchased in exchange for virtual currency. For items recognized over the player's estimated life, the Company currently recognizes digital game's revenues ratably within six months of purchase, while revenue received from subscription services is recognized ratably over the subscription term. The Company controls all aspects of the digital goods delivered to the consumer.
Costs of Sales: Cost of sales primarily consists of purchased materials, labor, tooling, manufacturing overheads and other inventory-related costs such as obsolescence.
Investment in Productions and Program Cost Amortization: The Company incurs costs in connection with the production of digital content, television programming and live action movies. The majority of these costs are capitalized by the Company as they are incurred and amortized using the individual-film-forecast method, whereby these costs are amortized in the proportion that the current year’s revenues bear to management’s estimate of total ultimate revenues as of the beginning of such period related to the program. Ultimate revenue estimates are periodically reviewed and adjustments, if any, will result in changes to amortization rates and estimated accruals for residuals and participations. Ultimate revenue includes estimates over a period not to exceed ten years following the date of release of the production. These capitalized costs are reported at the lower of cost, less accumulated amortization, or fair value, and reviewed for impairment when an event or change in circumstances occurs that indicates that impairment may exist. The fair value is determined using a discounted cash flow model which is primarily based on management’s future revenue and cost estimates. Certain of these agreements require the Company to pay minimum guaranteed advances ("MGs") for participations and residuals. MGs are recognized in the Consolidated Balance Sheets when a liability arises, usually on delivery of the television or film program to the Company. The current portion of MGs are recorded as Accounts payable and Accrued liabilities and the long-term portion are recorded as Other liabilities.
Royalties: The Company enters into license agreements with strategic partners, inventors, designers and others for the use of intellectual properties in its products. In addition, the Company enters into minimum guaranteed royalty arrangements related to the purchase of film and television rights for content to be delivered in the future. These agreements may call for payment in advance or future payment of minimum guaranteed amounts. Amounts paid in advance are recorded in Prepaid expenses and other current assets and charged to expense when the related revenue is recognized in the Consolidated Statements of Operations. If all or a portion of the minimum guaranteed amounts appear not to be recoverable through future use of the rights obtained under the license, the non-recoverable portion of the guaranty is charged to expense at that time.
Advertising: Production costs of commercials are expensed in the fiscal year during which the production is first aired. The costs of other advertising and promotion programs are expensed in the fiscal year incurred.
Shipping and Handling: The Company expenses costs related to the shipment and handling of goods to customers as incurred. In 2025, 2024 and 2023, these costs were $207.8 million, $199.2 million and $225.6 million, respectively, and are included in Selling, distribution and administration expenses in the Company’s Consolidated Statements of Operations.
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
Operating Leases: The Company leases certain property, vehicles and other equipment through operating leases. Operating lease right-of-use assets are recorded within Property, plant and equipment and the related liabilities recorded within Accrued liabilities and Other liabilities on the Company’s Consolidated Balance Sheets. The Company has no material finance leases.
Operating lease assets represent the Company’s right-to-use the underlying asset for the lease term and lease liabilities represent an obligation to make lease payments according to the terms of the lease. Operating lease assets and liabilities are recognized at the inception of the lease agreement based on the estimated present value of lease payments over the lease term, using our incremental borrowing rate based on information available on the lease commencement date. The Company capitalizes non-lease components for equipment leases, but expenses non-lease components as incurred for real estate leases. Leases with an expected term of 12 months or less are not capitalized. Lease expense under such leases is recorded straight-line over the life of the lease. Refer to Note 18, Leases, for further details on the Company's operating leases.
Income Taxes: Hasbro uses the asset and liability approach for financial accounting and reporting of income taxes. Deferred income taxes reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred taxes are measured using rates expected to apply to taxable income in years in which those temporary differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.
The Company recognizes deferred tax assets to the extent it believes that these assets are more likely than not to be realized. In making such a determination, all available positive and negative evidence is considered, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. The assumptions utilized in determining future taxable income require significant judgment and are consistent with the plans and estimates used to manage the underlying businesses. Actual operating results in future years could differ from current assumptions, judgments and estimates. However, the Company believes that it is more likely than not that most of the deferred tax assets recorded on our Consolidated Balance Sheets will ultimately be realized. To the extent we consider it is more likely than not that a deferred tax asset will not be recovered, a valuation allowance is established. If it is determined that our deferred tax assets will be realizable in the future in excess of their net recorded amount, an adjustment would be made to the deferred tax asset valuation allowance, which would reduce the provision for income taxes.
The Company uses a two-step process for the measurement of uncertain tax positions that have been taken or are expected to be taken in a tax return. The first step is determination of whether the tax position should be recognized in the consolidated financial statements. The second step determines the measurement of the tax position. The Company records potential interest and penalties on uncertain tax positions as a component of Income tax expense.
Foreign Currency Translation: Foreign currency assets and liabilities are translated into U.S. dollars at period-end exchange rates, and revenues, costs and expenses are translated at weighted average exchange rates during each reporting period. Net earnings include gains or losses resulting from foreign currency transactions, totaling a net gain of $22.4 million in 2025, and, when required, translation gains and losses resulting from the use of the U.S. dollar as the functional currency in highly inflationary economies. Other gains and losses resulting from translation of financial statements are a component of Other comprehensive earnings (loss).
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
Pension Plans, Postretirement and Postemployment Benefits: Pension expense and related amounts in the Consolidated Balance Sheets are based on actuarial computations of current and future benefits. The assumed discount rate for pension and postretirement benefit plans is determined by considering yield curves constructed of a large population of high-quality corporate bonds and reflects the matching of the plans' liability cash flows to the yield curves. Actual results that differ from the actuarial assumptions are accumulated and, if outside a certain corridor, amortized over future periods and therefore affect recognized expense in future periods. The corridor used for this purpose is equal to 10% of the greater of plan liabilities or market asset values, and future periods vary by plan, but generally equal the actuarial determined average expected future working lifetime of active plan participants. The Company’s policy is to fund amounts which are required by applicable regulations and which are tax deductible. The estimated amounts of future payments to be made under other retirement programs are being accrued currently over the period of active employment and are also included in pension expense. Hasbro also has a contributory postretirement health and life insurance plan covering substantially all employees who retired under any of its United States defined benefit pension plans prior to January 1, 2020, and meet certain age and length of service requirements.
Share-Based Compensation: The Company has a share-based employee compensation plan for employees and non-employee members of the Company’s Board of Directors. Under this plan the Company may grant stock options at or above the fair market value of the Company’s stock, as well as restricted stock, restricted stock units and contingent stock performance awards. All awards are measured at fair value at the date of the grant and amortized as expense on a straight-line basis over the requisite service period of the award. For awards contingent upon Company performance, the measurement of the expense for these awards is based on the Company’s current estimate of its performance over the performance period. The Company recognizes forfeitures as incurred. Refer to Note 16, Share-Based Awards, for further discussion.
Dividend Equivalent Units: Beginning with employee stock incentive awards granted in 2022, the payment of cash dividends to shareholders also results in the crediting of dividend equivalent units (“DEUs”) to holders of restricted stock units ("RSUs") and contingent stock performance awards ("PSUs") granted under the Company's Restated 2003 Stock Incentive Plan, as amended, for employees as defined and described in Note 16, Share-Based Awards. The DEUs are credited as additional RSUs or PSUs and settled concurrently with the vesting of associated awards. DEUs are forfeited in the event the underlying RSUs or PSU's do not vest. The dividend equivalent value of forfeitable DEUs is treated as a reduction of Retained earnings or, if the Company is in a retained deficit position, as a reduction of Additional paid-in capital.
Risk Management Contracts: Hasbro uses foreign currency forward and option contracts to mitigate the impact of currency rate fluctuations on firmly committed and projected future foreign currency transactions. These over-the-counter contracts, which hedge future purchases of inventory, product sales, as well as other cross-border currency requirements not denominated in the functional currency of the business unit, are primarily denominated in United States, Canadian and Hong Kong dollars as well as Euros and British pound sterling. All contracts are entered into with a number of counterparties, all of which are major financial institutions. The Company believes that a default by a counterparty would not have a material adverse effect on the financial condition of the Company. Hasbro does not enter into derivative financial instruments for speculative purposes.
At the inception of the contracts, Hasbro designates its derivative financial instruments as either cash flow or fair value hedges. The Company formally documents all relationships between hedging instruments and hedged items as well as its risk management objectives and strategies for undertaking various hedge transactions. All hedges designated as cash flow hedges are linked to forecasted transactions and the Company assesses, both at the inception of the hedge and on an ongoing basis, the effectiveness of the derivative financial instruments used in hedging transactions in offsetting changes in the cash flows of the forecasted transaction.
The Company records all derivative financial instruments, such as foreign currency exchange contracts, on the Consolidated Balance Sheets at fair value. Changes in the fair values that are designated as cash flow hedges are deferred and recorded as a component of Accumulated other comprehensive loss (“AOCL”) until the hedged transactions occur and are then recognized in the Consolidated Statements of Operations. The Company’s foreign currency contracts hedging anticipated cash flows are designated as cash flow hedges. When it is determined that a derivative financial instrument is not highly effective as a hedge, the Company discontinues hedge accounting prospectively. Any gain or loss deferred through that date remains in AOCL until the forecasted transaction occurs, at which time it is reclassified to the Consolidated Statements of Operations. To the extent the transaction is no longer deemed probable of occurring, hedge accounting treatment is discontinued and amounts deferred would be
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
reclassified to the Consolidated Statements of Operations. In the event hedge accounting requirements are not met, gains and losses on such instruments are included in the Consolidated Statements of Operations. The Company uses derivative financial instruments to economically hedge intercompany loans denominated in foreign currencies. The Company does not use hedge accounting for these contracts as changes in the fair value of these contracts are substantially offset by changes in the fair value of the intercompany loans.
Recent Accounting Pronouncements
Recently Adopted Accounting Pronouncements
In December 2023, the FASB issued Accounting Standard Update ("ASU") 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The amendments in this update enhance the transparency and decision usefulness of income tax disclosures. This amendment requires public companies to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. Additionally, under the amendment, entities are required to disclose the amount of income taxes paid disaggregated by federal, state and foreign taxes, as well as disaggregated by material individual jurisdictions. Finally, the amendment requires entities to disclose income from continuing operations before income tax expense disaggregated between domestic and foreign and income tax expense from continuing operations disaggregated by federal, state and foreign. The new standard is effective for fiscal years beginning after December 15, 2024. The Company adopted this standard as part of this Annual Report. Refer to Note 13, Income Taxes, for the revised disclosures consistent with the new standard.
Accounting Standards Issued But Not Yet Adopted
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures. The new standard requires enhanced additional disclosures related to certain expense categories. The new standard is effective for fiscal years beginning after December 15, 2026. We are assessing the effect on our 2027 annual consolidated financial statement disclosures; however, adoption will not impact our consolidated balance sheets or income statements.
In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—
Internal-Use Software (Subtopic 350-40). The standard removes all references to the previously existing software development project stages and require entities to start capitalizing software costs when management has authorized and committed funding to a software project and it is probable that the project will be completed with its intended functionality. The new standard is effective for fiscal years beginning after December 15, 2027. Early adoption is permitted and can be applied prospectively, retrospectively, or utilizing a modified transition approach. We are currently assessing the impact of this ASU on our consolidated financial statements.
All other ASUs issued but not yet adopted were assessed and determined to be not applicable or are not expected to have a material impact on our consolidated financial statements or financial statement disclosures.
(2) Revenue Recognition
Contract Assets and Liabilities
In the ordinary course of business, the Company enters into contracts to license certain of the Company’s intellectual property, providing licensees right-to-use or access such intellectual property for use in the production and sale of consumer products and digital game development, location-based entertainment, and for use within content for distribution over streaming platforms and for television and film. The Company also licenses owned television and film content for distribution to third parties in formats that include broadcast, digital streaming and theatrical. Through these arrangements, the Company may receive advanced royalty payments from licensees, either in advance of a licensees’ subsequent sales to customers or prior to the completion of the Company’s performance obligation. In addition, the Wizards of the Coast and Digital Gaming segment may receive advanced payments from end users of its digital games at the time of the initial purchase, through in-application purchases or through subscription services. The Company defers revenues on all licensee and digital gaming advanced payments until the respective performance obligations are satisfied.
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
The Company records the aggregate deferred revenues as contract liabilities, with the current portion recorded within Accrued liabilities and the long-term portion recorded within Other liabilities in the Company’s Consolidated Balance Sheets. The Company records contract assets, primarily related to (1) minimum guarantees being recognized in advance of contractual invoicing, which are recognized ratably over the terms of the respective license periods, and (2) film and television distribution revenues recorded for content delivered, where payment will occur over the license term. The current portion of contract assets is recorded in Prepaid expenses and other current assets and the long-term portion is recorded within Other assets.
The opening and closing balances of contract assets and contract liabilities are as follows:
| (In millions) | 2025 | 2024 | |||||||||||||||
| Contract Assets: | |||||||||||||||||
| Balance, beginning of period | $ | 241.4 | $ | 213.3 | |||||||||||||
| Balance, end of period | $ | 282.9 | $ | 241.4 | |||||||||||||
| Contract Liabilities: | |||||||||||||||||
| Balance, beginning of period | $ | 236.8 | $ | 230.8 | |||||||||||||
| Balance, end of period | $ | 190.5 | $ | 236.8 |
The increase in contract assets during 2025 and 2024 is primarily the result of an increase in the amount of revenues recognized in advance of contractual invoicing, offset by the impact of previously unbilled revenues that were invoiced throughout the period within the ordinary course of business.
The change in contract liabilities during 2025 and 2024 is primarily the result of an increase in the amount of advanced payments received from customers relating to performance obligations that had not yet been satisfied, offset by $218.0 million and $134.2 million of revenues recognized that were included in the beginning contract liabilities balance as of December 29, 2024 and December 31, 2023, respectively.
Unsatisfied Performance Obligations
As of December 28, 2025, revenue for unsatisfied performance obligations expected to be recognized in the future is $965.4 million, primarily for intellectual property to be made available in the future under existing agreements with merchandise and co-branding licensees and television station affiliates. Of this amount, we expect to recognize approximately $223.5 million in 2026, $164.5 million in 2027, $128.9 million in 2028, and $448.5 million thereafter. These amounts include only fixed consideration or minimum guarantees and do not include amounts related to (i) contracts with an original expected term of one year or less or (ii) licenses of intellectual property that are solely based on the sales of the licensee.
Accounts Receivable and Allowance for Credit Losses
The Company’s balance for Accounts receivable on the Consolidated Balance Sheets as of December 28, 2025 and December 29, 2024 are primarily derived from contracts with customers. A summary of the related allowance for credit losses activity is as follows:
| (In millions) | 2025 | 2024 | |||||||||
| Balance, beginning of period | $ | 25.8 | $ | 12.7 | |||||||
| Provisions/charges to income | 43.8 | 18.9 | |||||||||
| Amounts charged off and other | (9.3) | (4.6) | |||||||||
| Foreign currency impact | 1.0 | (1.2) | |||||||||
| Balance, end of period | $ | 61.3 | $ | 25.8 |
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
Disaggregation of revenues
The Company disaggregates its revenues from contracts with customers by reportable segment: Wizards of the Coast and Digital Gaming, Consumer Products, and Entertainment. The Company further disaggregates revenues within its Wizards of the Coast and Digital Gaming segment by category: Tabletop Gaming and Digital and Licensed Gaming; within its Consumer Products segment by major geographic region: North America, Europe, Latin America, and Asia Pacific; and within its Entertainment segment by category: Family Brands and Film and TV. Finally, the Company disaggregates its revenues into three brand portfolios: Grow Brands, Optimize Brands, and Reinvent Brands. We believe these collectively depict how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors.
In 2025, 2024, and 2023 the Company’s largest customers were Amazon.com, Inc. and Wal-Mart, Inc. with sales to each of these customers amounting to 11% and 9% of consolidated net revenues in 2025, respectively. In 2024, sales to these customers amounted to 11% and 12%, respectively, of consolidated net revenues. In 2023, sales to each of these customers amounted to 11% of consolidated net revenues. Net revenues from the Company’s major customers are reported within the Wizards of the Coast and Digital Gaming segment, Consumer Products segment, and the Entertainment segment.
The following table represents consolidated Wizards of the Coast and Digital Gaming segment net revenues by category:
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Tabletop Gaming | $ | 1,686.6 | $ | 1,039.6 | $ | 1,072.5 | |||||||||||
| Digital and Licensed Gaming | 500.3 | 471.7 | 385.1 | ||||||||||||||
| Net revenues | $ | 2,186.9 | $ | 1,511.3 | $ | 1,457.6 |
The following table represents consolidated Consumer Products segment net revenues by major geographic region:
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| North America | $ | 1,421.7 | $ | 1,493.0 | $ | 1,649.1 | |||||||||||
| Europe | 566.0 | 519.7 | 669.5 | ||||||||||||||
| Asia Pacific | 249.4 | 286.7 | 256.3 | ||||||||||||||
| Latin America | 200.5 | 244.5 | 311.5 | ||||||||||||||
| Net revenues | $ | 2,437.6 | $ | 2,543.9 | $ | 2,886.4 |
The following table represents consolidated Entertainment segment net revenues by category:
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Family Brands | $ | 66.7 | $ | 73.7 | $ | 83.8 | |||||||||||
| Film and TV (1) | 10.1 | 6.6 | 575.5 | ||||||||||||||
| Net revenues | $ | 76.8 | $ | 80.3 | $ | 659.3 |
(1) Net revenues for Film and TV in 2023 include amounts associated with the Company's eOne Film and TV business that was sold to Lionsgate during 2023, as discussed in Note 3, Sale of Entertainment One Film and TV Business.
The following table represents consolidated net revenues by brand portfolio:
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Grow Brands | $ | 3,479.1 | $ | 2,797.1 | $ | 2,857.5 | |||||||||||
| Optimize Brands | 698.2 | 731.5 | 840.6 | ||||||||||||||
| Reinvent Brands | 524.0 | 606.9 | 768.0 | ||||||||||||||
| Non-Hasbro Branded Film and TV | — | — | 537.2 | ||||||||||||||
| Net revenues | $ | 4,701.3 | $ | 4,135.5 | $ | 5,003.3 |
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(3) Sale of Entertainment One Film and TV Business
On December 27, 2023, the Company completed the sale of eOne Film and TV to Lionsgate, pursuant to the terms of an Equity Purchase Agreement dated August 3, 2023, among Hasbro and Lionsgate for a purchase price of $375.0 million in cash, subject to certain purchase price adjustments plus the assumption by Lionsgate of production financing loans. The Equity Purchase Agreement also included a holdback amount that was retained by Lionsgate upon the execution of the sale but remained recoverable by Hasbro if certain terms were not satisfied by Lionsgate within 30 days of the first anniversary of the agreement.
During the year ended December 28, 2025, the Company was informed by Lionsgate of the satisfaction of the requirements under the agreement and the final holdback amount was settled, resulting in a $25.0 million Loss on disposal of business on the Consolidated Statements of Operations.
During the year ended December 29, 2024, the Company recorded a $37.4 million Loss on disposal of business on the Consolidated Statements of Operations associated with certain purchase price and related adjustments.
During the year ended December 31, 2023, the Company recorded a $539.0 million Loss on disposal of business on the Consolidated Statements of Operations based on the value of the net assets held by eOne Film and TV, which included goodwill and intangible assets. The Company also recorded pre-tax cash transaction expenses of $35.1 million within Selling, distribution and administration expense on the Consolidated Statements of Operations for the year ended December 31, 2023.
Prior to the sale of eOne Film and TV in 2023, the operations of eOne Film and TV did not meet the criteria to be presented as discontinued operations in accordance with GAAP and eOne Film and TV did not represent an individually significant component of the Company’s business. As a result, income from operations before income taxes, attributable to eOne Film and TV, was recorded in the Company's Consolidated Statements of Operations, within the Entertainment segment, through the sale transaction closing date. The Loss before income taxes attributable to eOne Film and TV through the date of the transaction was $371.6 million for fiscal year 2023.
(4) Earnings Per Common Share
The Company computes earnings per share ("EPS") in accordance with ASC Topic 260, Earnings per Share. Basic net earnings per share is computed by dividing net earnings by the weighted average number of shares outstanding for the year as well as awards that have not been issued but all contingencies have been met.
Diluted net earnings per share is similar except that the weighted average number of shares outstanding is increased by dilutive securities, and net earnings are adjusted, if necessary, for certain amounts related to dilutive securities. Dilutive securities include shares issuable upon exercise of stock options for which the market price exceeds the exercise price, less shares which could have been purchased by the Company with the related proceeds. Dilutive securities also include shares issuable under restricted stock unit award agreements. Options and restricted stock unit awards totaling 4.2 million, 1.6 million and 2.5 million for 2025, 2024, and 2023, respectively, were excluded from the calculation of diluted earnings per share because to include them would have been antidilutive. Of the fiscal 2025 and 2023 amounts, 3.6 million and 1.6 million shares would have been included in the calculation of diluted shares had the Company not had a net loss for the years ended December 28, 2025 and December 31, 2023, respectively. Assuming that these awards and options were included, under the treasury stock method, they would have resulted in an additional 1.5 million and 0.2 million shares being included in the diluted earnings per share calculation for the years ended December 28, 2025 and December 31, 2023, respectively.
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
The following table sets forth the reconciliation of basic and diluted earnings per share:
| (In millions, except per share data) | 2025 | 2024 | 2023 | ||||||||||||||
| Net (loss) earnings attributable to Hasbro, Inc. | $ | (322.4) | $ | 385.6 | $ | (1,489.3) | |||||||||||
| Average shares outstanding | 140.2 | 139.4 | 138.8 | ||||||||||||||
| Effect of dilutive securities - Options and other share-based awards | — | 0.9 | — | ||||||||||||||
| Equivalent shares | 140.2 | 140.3 | 138.8 | ||||||||||||||
| Net (loss) earnings attributable to Hasbro, Inc. per common share | |||||||||||||||||
| Basic | $ | (2.30) | $ | 2.77 | $ | (10.73) | |||||||||||
| Diluted | $ | (2.30) | $ | 2.75 | $ | (10.73) |
(5) Other Comprehensive Earnings (Loss)
Components of other comprehensive earnings (loss) are presented within the Consolidated Statements of Comprehensive Earnings (Loss), net of tax. Income tax effects are released from Accumulated other comprehensive loss ("AOCL") at the effective tax rate during the period in which the components are released.
Changes in the components of AOCL are as follows:
| (In millions) | Pension and Postretirement Amounts | Derivative Instruments | Available for-Sale Securities | Foreign Currency Translation Adjustments | Total AOCL | ||||||||||||||||||||||||
| Balance, December 25, 2022 | $ | (3.0) | $ | (12.0) | $ | (0.1) | $ | (239.8) | $ | (254.9) | |||||||||||||||||||
| Other comprehensive earnings (loss) before reclassifications, before tax | (0.9) | (11.4) | — | 59.4 | 47.1 | ||||||||||||||||||||||||
| Income tax benefit | — | 2.8 | — | — | 2.8 | ||||||||||||||||||||||||
| Other comprehensive earnings (loss), before reclassifications | (0.9) | (8.6) | — | 59.4 | 49.9 | ||||||||||||||||||||||||
| Reclassifications from AOCL to earnings, before tax | (0.4) | 5.7 | — | — | 5.3 | ||||||||||||||||||||||||
| Income tax (expense) benefit | 0.1 | (1.9) | — | — | (1.8) | ||||||||||||||||||||||||
| Reclassifications from AOCL to earnings | (0.3) | 3.8 | — | — | 3.5 | ||||||||||||||||||||||||
| Other comprehensive earnings (loss) | (1.2) | (4.8) | — | 59.4 | 53.4 | ||||||||||||||||||||||||
| Balance, December 31, 2023 | $ | (4.2) | $ | (16.8) | $ | (0.1) | $ | (180.4) | $ | (201.5) | |||||||||||||||||||
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
| (In millions) | Pension and Postretirement Amounts | Derivative Instruments | Available for-Sale Securities | Foreign Currency Translation Adjustments | Total AOCL | ||||||||||||||||||||||||
| Other comprehensive (loss) earnings before reclassifications, before tax | (3.4) | 11.1 | — | (48.8) | (41.1) | ||||||||||||||||||||||||
| Income tax (expense) benefit | 0.5 | (3.8) | — | — | (3.3) | ||||||||||||||||||||||||
| Other comprehensive (loss) earnings, before reclassifications | (2.9) | 7.3 | — | (48.8) | (44.4) | ||||||||||||||||||||||||
| Reclassifications from AOCL to earnings, before tax | (1.0) | 0.7 | — | — | (0.3) | ||||||||||||||||||||||||
| Income tax (expense) benefit | 0.1 | (0.3) | — | — | (0.2) | ||||||||||||||||||||||||
| Reclassifications from AOCL to earnings | (0.9) | 0.4 | — | — | (0.5) | ||||||||||||||||||||||||
| Other comprehensive (loss) earnings | (3.8) | 7.7 | — | (48.8) | (44.9) | ||||||||||||||||||||||||
| Balance, December 29, 2024 | $ | (8.0) | $ | (9.1) | $ | (0.1) | $ | (229.2) | $ | (246.4) | |||||||||||||||||||
| Other comprehensive earnings (loss) before reclassifications, before tax | 0.9 | (16.0) | — | 40.1 | 25.0 | ||||||||||||||||||||||||
| Income tax benefit (expense) | (0.3) | 3.5 | — | — | 3.2 | ||||||||||||||||||||||||
| Other comprehensive earnings (loss), before reclassifications | 0.6 | (12.5) | — | 40.1 | 28.2 | ||||||||||||||||||||||||
| Reclassifications from AOCL to earnings, before tax | 0.4 | 0.5 | — | — | 0.9 | ||||||||||||||||||||||||
| Income tax expense | (0.2) | — | — | — | (0.2) | ||||||||||||||||||||||||
| Reclassifications from AOCL to earnings | 0.2 | 0.5 | — | — | 0.7 | ||||||||||||||||||||||||
| Other comprehensive earnings (loss) | 0.8 | (12.0) | — | 40.1 | 28.9 | ||||||||||||||||||||||||
| Balance, December 28, 2025 | $ | (7.2) | $ | (21.1) | $ | (0.1) | $ | (189.1) | $ | (217.5) |
Gains (Losses) on Derivative Instruments
As of December 28, 2025, the Company had remaining net deferred losses on foreign currency forward contracts, net of tax, of $8.3 million in AOCL. These instruments hedge payments related to inventory purchased in the fourth quarter of 2025 or forecasted to be purchased in 2026, intercompany expenses expected to be paid or received during 2026 and cash receipts for sales made at the end of the fourth quarter of 2025 or forecasted to be made in 2026. These amounts will be reclassified into the Consolidated Statements of Operations upon the sale of the related inventory or recognition of the related sales or expenses.
In addition to foreign currency forward contracts, the Company entered into hedging contracts on future interest payments related to the 5.10% Notes due 2044 (refer to Note 12, Long-Term Debt and Other Financing). At the date of debt issuance, these contracts were terminated and the fair value on the date of settlement was deferred in AOCL and is being amortized to interest expense over the life of the related notes using the effective interest rate method. As of December 28, 2025, deferred losses, net of tax, of $12.8 million related to these instruments remained in AOCL. For each of the years ending December 28, 2025, December 29, 2024, and December 31, 2023, losses, net of tax, of $0.7 million related to these hedging instruments were reclassified from AOCL to net earnings.
Of the amounts included in AOCL as of December 28, 2025, the Company expects net losses of approximately $7.2 million to be reclassified to the Consolidated Statements of Operations within the next 12 months. However, the amount ultimately realized in earnings is dependent on the fair value of the hedging instruments on the settlement dates.
Refer to Note 19, Derivative Financial Instruments, to the consolidated financial statements for additional discussion on reclassifications from AOCL to earnings.
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(6) Property, Plant and Equipment
| (In millions) | 2025 | 2024 | |||||||||
| Land and improvements | $ | 3.6 | $ | 3.4 | |||||||
| Buildings and improvements | 213.8 | 201.0 | |||||||||
| Machinery, equipment and software | 508.8 | 554.9 | |||||||||
| Tools, dies and molds | 377.3 | 365.3 | |||||||||
| Right-of-use assets | 204.3 | 204.7 | |||||||||
| Total property, plant and equipment, gross | 1,307.8 | 1,329.3 | |||||||||
| Less: accumulated depreciation and right-of-use asset amortization | (1,060.0) | (1,026.7) | |||||||||
| Total property, plant and equipment, net | $ | 247.8 | $ | 302.6 |
Expenditures for maintenance and repairs which do not materially extend the life of the assets are charged to operations as incurred. In 2025, 2024 and 2023 the Company recorded $69.5 million, $94.7 million and $127.7 million, respectively, of depreciation expense. Refer to Note 18, Leases, for additional discussion on right-of-use assets.
(7) Software Development Costs
Capitalized software development costs include both direct costs for internally developed titles and payments to third-party software developers under development agreements that have been incurred by the Company subsequent to establishing the technological feasibility of a software title. Prior to establishing technological feasibility of a software title, any costs incurred are recorded as product development expenses.
As of December 28, 2025 and December 29, 2024, $385.6 million and $264.4 million, of software development costs were capitalized within Other assets in the Consolidated Balance Sheets, respectively.
Amortization and impairments of software titles that have been released are recorded within Cost of sales within the Consolidated Statements of Operations. The Company did not release any software titles during 2025, 2024 or 2023 that were previously capitalized on the Consolidated Balance Sheets, and therefore there was no amortization or impairments recognized in the Consolidated Statement of Operations. Write-offs of unreleased titles are recorded within Selling, distribution and administration. The Company did not write-off any unreleased titles in 2025 or 2023. Approximately $24.4 million of write-offs occurred during 2024, relating to the cancellation of two unreleased titles.
(8) Goodwill and Intangible Assets
Goodwill
Changes in the carrying amount of goodwill, by operating segment are as follows:
| (In millions) | Wizards of the Coast and Digital Gaming | Consumer Products | Entertainment | Total | |||||||||||||||||||
| Balance, December 31, 2023 | $ | 371.7 | $ | 1,582.3 | $ | 325.2 | $ | 2,279.2 | |||||||||||||||
| Foreign exchange translation | (0.7) | (0.3) | — | (1.0) | |||||||||||||||||||
| Balance, December 29, 2024 | 371.0 | 1,582.0 | 325.2 | 2,278.2 | |||||||||||||||||||
| Impairment | — | (1,021.9) | — | (1,021.9) | |||||||||||||||||||
| Foreign exchange translation | (0.5) | 0.9 | — | 0.4 | |||||||||||||||||||
| Balance, December 28, 2025 | $ | 370.5 | $ | 561.0 | $ | 325.2 | $ | 1,256.7 |
The Company performs an annual impairment assessment on goodwill. This annual impairment assessment is performed in the fourth quarter of the Company’s fiscal year. During the fourth quarter of 2025, the Company performed a qualitative goodwill assessment with respect to each of its reporting units. Based on its qualitative assessments, the Company determined it is not more likely than not that the carrying values exceed the fair values for any of its reporting units. As a result, the Company concluded it was not necessary to perform a quantitative test for impairment of goodwill for any reporting unit.
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
In addition to the annual test, if an event occurs or circumstances change that indicate that the carrying value of a reporting unit may not be recoverable, the Company will perform an interim impairment test. Due to increased tariffs, including reciprocal tariffs announced by the U.S. government in April 2025, the escalation of ongoing trade policy disputes between international governments, the financial performance of certain reporting units being lower than previously forecasted, and other macroeconomic headwinds, during the second quarter of 2025, the Company noted downward revisions to operating income and cash flow forecasts for certain of its reporting units within the Consumer Products and Entertainment segments. As a result, during the second quarter of 2025, the Company performed an interim quantitative impairment test for the North America, Europe, Asia Pacific, and Latin America Consumer Products reporting units, as well as the Family Brands reporting unit within the Entertainment segment. Additionally, due to our ongoing transformation, we concluded that, as of the second quarter of 2025, the North America, Europe, Asia Pacific, and Latin America reporting units had similar economic characteristics and should be aggregated for purposes of testing goodwill for impairment. Our conclusion was based on a detailed analysis of the aggregation criteria set forth in ASC Topic 280, Segment Reporting, and in ASC Topic 350, Intangibles - Goodwill and Other. These reporting units serve similar clients and have similar products, and as of the second quarter of 2025 had similar sourcing and distribution methods that along with our ongoing transformation has resulted in similar economic characteristics.
As a result of the quantitative tests performed prior to and following the aggregation, the Company determined that the carrying values of our regional Consumer Products reporting units exceeded their expected fair values and recorded pre-tax non-cash impairment charges of $1,021.9 million within the Consolidated Statements of Operations for the fiscal year ended 2025. The fair values of North America and Europe were determined considering a discounted cash flow model which is primarily based on management’s future revenue and cost estimates, which included the estimated impact of tariff policies in effect and the related macroeconomic environment, and a discount rate. The fair values of the Asia Pacific and Latin America reporting units were determined considering a discounted cash flow model weighted equally with the market approach, which is primarily based on multiples of comparable public companies. No impairments were recorded related to the Family Brands reporting unit.
As of December 28, 2025, $325.2 million of goodwill is allocated to the Family Brands reporting unit. As of the date of the most recent quantitative test, which occurred during the second quarter of 2025, the fair value of our Family Brands reporting unit, within the Entertainment segment, exceeded the carrying value of that reporting unit by approximately 15%. The fair value of the Family Brands reporting unit was determined considering a discounted cash flow model weighted equally with the market approach, which is primarily based on multiples of comparable public companies. For the Family Brands reporting unit, critical assumptions included a discount rate approximating 9.5%, a terminal value revenue growth rate of 3.0%, and a terminal operating profit margin consistent with levels achieved in recent historical periods when excluding one-time impairment and disposal charges. Although we believe the assumptions and estimates made were reasonable and appropriate, these estimates are based on a number of factors including historical experience and information obtained from reporting unit management. Actual results could differ from these estimates, especially given uncertainty related to tariffs, global trade policy, and global macroeconomic conditions.
The Company did not record a goodwill impairment charge in 2024. In 2023, the Company recorded $1,191.2 million of non-cash goodwill impairment charges related to the Family Brands and Film and TV reporting units within the Company's Entertainment segment, as the carrying value of the reporting units exceeded their expected fair value, as determined using a discounted cash flow model which was primarily based on management’s future revenue and cost estimates.
Other Intangible Assets, Net
The following table represents a summary of the Company’s other intangible assets:
| (In millions) | 2025 | 2024 | |||||||||
| Acquired product rights | $ | 793.2 | $ | 863.9 | |||||||
| Accumulated amortization | (412.2) | (421.2) | |||||||||
| Amortizable intangible assets | 381.0 | 442.7 | |||||||||
| Product rights with indefinite lives | 75.7 | 75.7 | |||||||||
| Total other intangibles assets, net | $ | 456.7 | $ | 518.4 |
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
Certain intangible assets relating to rights obtained in the Company’s acquisition of Milton Bradley in 1984 and Tonka in 1991 are not amortized. These rights were determined to have indefinite lives and are included as product rights with indefinite lives in the table above. The Company tests these assets for impairment on an annual basis in the fourth quarter of each year or when an event occurs or circumstances change that indicate that the carrying value may not be recoverable. The Company completed its annual impairment tests of indefinite-lived intangible assets in the fourth quarter of 2025, concluding that there was no impairment of these assets. The Company did not record any impairments of its indefinite-lived intangible assets in 2025, 2024, or 2023.
The Company’s other intangible assets are amortized over their remaining useful lives, and accumulated amortization of these other intangibles is reflected in Other intangible assets, net in the accompanying Consolidated Balance Sheets. Other intangible assets are reviewed for indications of impairment whenever events or changes in circumstances indicate the carrying value may not be recoverable. The Company did not record any impairments of its definite-lived intangible assets in 2025 or 2024.
In 2023, the Company recorded a non-cash intangible asset impairment charge of $65.0 million related to the eOne Trademark associated with the Film and TV reporting unit. Additionally, during 2023, the Company recorded a $51.0 million impairment charge related to the PJ MASKS definite-lived intangible asset based upon lower revenue forecasts for this intangible asset. Both charges were recorded in Selling, distribution and administration expense within the Consolidated Statements of Operations in the Entertainment segment.
The Company currently estimates amortization expense related to the above intangible assets for the next five years to be approximately:
| (In millions) | ||||||||
| 2026 | $ | 58.4 | ||||||
| 2027 | 58.4 | |||||||
| 2028 | 57.3 | |||||||
| 2029 | 56.6 | |||||||
| 2030 | 56.6 | |||||||
| Thereafter | 93.7 | |||||||
| Total | $ | 381.0 |
(9) Equity Method Investment
The Company owns an interest in a joint venture, Discovery Family Channel (“DFC”), with Warner Bros. Discovery, Inc. ("WBD"). The Company has determined that it does not meet the control requirements to consolidate DFC and accounts for the investment using the equity method of accounting. DFC was established to create a cable television network in the United States dedicated to high-quality children’s and family entertainment. In October 2009, the Company purchased an initial 50% share in DFC for a payment of $300.0 million and certain future tax payments based on the value of certain tax benefits expected to be received by the Company. On September 23, 2014, the Company and WBD amended their relationship with respect to DFC and WBD increased its equity interest in DFC to 60% while the Company retained a 40% equity interest in DFC.
During the fourth quarter of 2024 and 2023, the Company reviewed its investment in DFC for an other than temporary decline in value of the investment due to decreases in forecasted revenues. The Company determined that the fair value of the Company's interest in the joint venture was less than its carrying value, and as such, recorded an impairment loss of $80.0 million and $1.3 million, respectively, which is included in Other (income) expense, net in the Consolidated Statements of Operations. The Company utilized the discounted cash flow method under the income approach to estimate the fair value of DFC, which requires assumptions and estimates that include: future annual cash flows, income tax rates, discount rates, estimated growth rates, and other market factors. Accelerating changes in the cable distribution industry, including technological changes and expanding options for digital content offerings, have resulted in the fragmentation of viewership, declines in subscribers to the traditional cable bundle, and pricing pressures. These factors led to the lower valuation of DFC as compared to its carrying value. As of December 28, 2025, the Company had no remaining investment balance for DFC. As of December 29, 2024, the Company’s investment in DFC had a balance of $5.6 million.
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
The Company’s share in the earnings of DFC for the years ended 2025, 2024 and 2023 totaled $1.8 million, $9.4 million and $10.9 million, respectively, and is included as a component of Other (income) expense, net in the Consolidated Statements of Operations. The Company did not enter into any other material transactions with DFC during 2025, 2024 and 2023.
The Company also has a related liability due to WBD under the existing tax sharing agreement. The balance of the associated liability, including imputed interest, was $0.3 million and $3.0 million as of December 28, 2025 and December 29, 2024, respectively, and is included as a component of Other liabilities in the accompanying Consolidated Balance Sheets. During 2025, 2024 and 2023, the Company made payments to WBD under this tax sharing agreement in the amount of $2.8 million, $6.7 million and $5.7 million, respectively.
(10) Investments in Productions
Investments in productions are predominantly monetized on a title-by-title basis and are recorded within Other assets in the Company's Consolidated Balance Sheets, to the extent they are considered recoverable against future revenues. These amounts are being amortized to program cost amortization using a model that reflects the consumption of the asset as it is released through various channels including broadcast licenses, theatrical release and home entertainment. Amounts capitalized are reviewed periodically on an individual title basis and any portion of the unamortized amount that appears not to be recoverable from future net revenues is expensed as part of program cost amortization during the period the loss becomes evident.
The Company's unamortized investments in productions consisted of the following:
| (In millions) | 2025 | 2024 | |||||||||
| Investment in Films and Television Programs: | |||||||||||
| Individual monetization: | |||||||||||
| Released, net of amortization | $ | 63.2 | $ | 68.4 | |||||||
| In production | 0.4 | 11.5 | |||||||||
| Pre-production | 4.0 | 7.4 | |||||||||
| Total individual monetization | 67.6 | 87.3 | |||||||||
| Film/TV group monetization: | |||||||||||
| Released, net of amortization | 29.8 | 37.5 | |||||||||
| In production | 0.3 | — | |||||||||
| Total film/TV group monetization | 30.1 | 37.5 | |||||||||
| Total program investments | $ | 97.7 | $ | 124.8 |
The Company's program cost amortization consisted of the following:
| (In millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Individual monetization | $ | 32.4 | $ | 40.4 | $ | 431.8 | ||||||||||||||
| Film/TV group monetization | 3.4 | 8.9 | 17.1 | |||||||||||||||||
| Total program cost amortization | $ | 35.8 | $ | 49.3 | $ | 448.9 |
Based on management’s total revenue estimates as of December 28, 2025, the Company's expected future amortization expenses for capitalized programming costs over the next three years are as follows:
| (In millions) | 2026 | 2027 | 2028 | |||||||||||||||||||||||||||||
| Released - Individual monetization | $ | 19.3 | $ | 14.5 | $ | 13.7 | ||||||||||||||||||||||||||
| Released - Film/TV group monetization | 6.7 | 7.2 | 7.7 | |||||||||||||||||||||||||||||
| Total future amortization expense | $ | 26.0 | $ | 21.7 | $ | 21.4 |
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(11) Additional Balance Sheet Information
Components of accrued liabilities are as follows:
| (In millions) | 2025 | 2024 | |||||||||
| Accrued royalties expense | $ | 207.7 | $ | 160.5 | |||||||
| Contract liabilities - current | 190.5 | 236.5 | |||||||||
| Payroll and management incentives | 158.2 | 121.1 | |||||||||
| Advertising | 88.2 | 58.7 | |||||||||
| Other taxes | 67.4 | 60.9 | |||||||||
| General vendor accruals | 46.8 | 46.1 | |||||||||
| Freight | 44.2 | 27.0 | |||||||||
| Supplier cancellation charges | 32.9 | 48.9 | |||||||||
| Lease liability - current | 30.6 | 29.8 | |||||||||
| Interest | 29.6 | 31.3 | |||||||||
| Defined contribution plans | 27.6 | 21.4 | |||||||||
| Restructuring | 19.3 | 46.9 | |||||||||
| Professional fees | 17.3 | 18.2 | |||||||||
| Accrued income taxes | 14.4 | 93.3 | |||||||||
| Insurance | 9.0 | 11.3 | |||||||||
| Participation and residuals | 6.8 | 8.8 | |||||||||
| Accrued expenses - productions | 0.7 | 0.7 | |||||||||
| Other | 47.5 | 38.4 | |||||||||
| Total accrued liabilities | $ | 1,038.7 | $ | 1,059.8 |
Prepaid expenses and other current assets include the current contract assets of $142.4 million and $179.5 million as of December 28, 2025 and December 29, 2024, respectively.
Other assets include deferred tax assets of $286.8 million and $424.6 million as of December 28, 2025 and December 29, 2024, respectively.
(12) Long-Term Debt and Other Financing
Components of Long-term debt are as follows:
| (In millions) | 2025 | 2024 | |||||||||||||||||||||
| Carrying Cost | Fair Value | Carrying Cost | Fair Value | ||||||||||||||||||||
| 3.90% Notes Due 2029 | $ | 900.0 | $ | 885.2 | $ | 900.0 | $ | 845.6 | |||||||||||||||
| 6.05% Notes Due 2034 | 500.0 | 530.7 | 500.0 | 502.2 | |||||||||||||||||||
| 6.35% Notes Due 2040 | 500.0 | 526.1 | 500.0 | 507.5 | |||||||||||||||||||
| 3.55% Notes Due 2026 | 497.0 | 495.3 | 591.9 | 578.0 | |||||||||||||||||||
| 3.50% Notes Due 2027 | 475.0 | 470.3 | 500.0 | 481.5 | |||||||||||||||||||
| 5.10% Notes Due 2044 | 300.0 | 267.5 | 300.0 | 261.3 | |||||||||||||||||||
| 6.60% Debentures Due 2028 | 109.9 | 116.4 | 109.9 | 114.4 | |||||||||||||||||||
| Total long-term debt | 3,281.9 | 3,291.5 | 3,401.8 | 3,290.5 | |||||||||||||||||||
| Less: Deferred debt expenses | 17.0 | — | 21.0 | — | |||||||||||||||||||
| Less: Current portion of long-term debt | 497.0 | 495.3 | — | — | |||||||||||||||||||
| Long-term debt | $ | 2,767.9 | $ | 2,796.2 | $ | 3,380.8 | $ | 3,290.5 |
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
In November 2019, in conjunction with the Company's acquisition of eOne, the Company issued an aggregate of $2.4 billion of senior unsecured debt securities (the "Notes") consisting of the following tranches: $300.0 million of notes due 2022 (the "2022 Notes") that bear interest at a fixed rate of 2.60%, $500.0 million of notes due 2024 (the "2024 Notes") that bear interest at a fixed rate of 3.00%, $675.0 million of notes due 2026 (the "2026 Notes") that bear interest at a fixed rate of 3.55%, and $900.0 million of notes due 2029 (the "2029 Notes") that bear interest at a fixed rate of 3.90%. Net proceeds from the issuance of the Notes, after deduction of $20.0 million of underwriting discount and fees, totaled $2.4 billion. These costs are being amortized over the life of the Notes outstanding, which range from five years to ten years from the date of issuance. During fiscal year 2021 and fiscal year 2024, the Company repaid in full its 2022 Notes and 2024 Notes, respectively.
The Notes bear interest at the stated rates but may be subject to upward adjustment if the credit rating of the Company is reduced by Moody's or Standard & Poor's. The adjustment can be from 0.25% to 2.00% based on the extent of the ratings decrease. The Company may redeem the Notes at its option at the greater of the principal amount of the Notes or the present value of the remaining scheduled payments discounted using the effective interest rate on applicable U.S. Treasury bills at the time of repurchase, plus 30 basis points (in the case of the 2026 Notes) or 35 basis points (in the case of the 2029 Notes). In addition, on and after August 19, 2029 for the 2029 Notes, such series of Notes will be redeemable, in whole at any time or in part from time to time, at the Company's option at a redemption price equal to 100% of the principal amount of the Notes to be redeemed plus any accrued and unpaid interest.
In May 2024, the Company issued an aggregate $500.0 million of senior unsecured debt securities that bear a fixed interest rate of 6.05% due 2034 (the "2034 Notes"). In connection with the issuance of the 2034 Notes, the 2034 Notes were issued with an original issuance discount of $1.4 million and the Company capitalized $5.3 million of debt issuance costs. The original issuance discount and debt issuance costs are amortized over the term of the 2034 Notes.
During 2025, the Company repurchased $94.9 million of its 2026 Notes and $25.0 million of its 2027 Notes, recording a total gain on extinguishment of $1.7 million, which was recorded in Other (income) expense, net in the Consolidated Statements of Operations. During 2024, the Company repurchased $83.1 million of its 2026 Notes and recorded a gain on extinguishment of $1.8 million, which was recorded in Other (income) expense, net in the Consolidated Statements of Operations.
The Company's borrowings have the following future contractual maturities:
| (In millions) | |||||
| 2026 | $ | 497.0 | |||
| 2027 | 475.0 | ||||
| 2028 | 109.9 | ||||
| 2029 | 900.0 | ||||
| 2030 | — | ||||
| Thereafter | 1,300.0 | ||||
| Total | $ | 3,281.9 |
The fair values of the Company’s long-term debt are considered Level 2 fair values (refer to Note 15, Fair Value of Financial Instruments, for further discussion of the fair value hierarchy) and are measured based on quoted prices at the end of the reporting periods in markets that are not active. The Company believes that this is the best information available for use in the fair value measurement.
Other Financing Arrangements
As of December 28, 2025, Hasbro had available an unsecured revolving credit agreement (see Amended Revolving Credit Agreement below) in the amount of $1.25 billion and unsecured uncommitted lines of credit from various banks approximating $186.8 million. The Company had no outstanding short-term borrowings under, or supported by, these lines of credit as of December 28, 2025 and December 29, 2024. During 2025 and 2024, Hasbro’s working capital needs were primarily fulfilled by cash available and cash generated from operations.
The Company's third amended and restated revolving credit agreement with Bank of America, as administrative agent, swing line lender, a letter of credit issuer and a lender and certain other financial institutions, as lenders
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
thereto (the "Amended Revolving Credit Agreement") provides the Company with commitments having a maximum aggregate principal amount of $1.25 billion. The Amended Revolving Credit Agreement contains certain financial covenants setting forth leverage and coverage requirements, and certain other limitations typical of an investment grade facility, including with respect to liens, mergers and incurrence of indebtedness. It also provides for a potential additional incremental commitment increase of up to $500.0 million subject to agreement of the lenders.
Loans under the revolving credit facility bear interest, at the Company’s option, at either the Adjusted Term Benchmark Rate, the Base Rate, or the Daily Benchmark Rate (each determined in accordance with the Amended Revolving Credit Agreement). In each case there is also a spread added to the rate, which fluctuates based upon the more favorable of the Company’s long-term debt ratings and the Company’s leverage. The Company is also required to pay a commitment fee in respect to the unused commitments under the facility, the rate for which is also determined based upon the more favorable of the Company's long-term debt ratings and leverage. The Amended Revolving Credit Agreement has a maturity date of September 20, 2028.
The Amended Revolving Credit Agreement contains affirmative and negative covenants typical of this type of facility, including: (a) restrictions on the Company’s and its domestic subsidiaries’ ability to allow liens on their assets, (b) restrictions on the incurrence of indebtedness, (c) restrictions on the Company’s and certain of its subsidiaries’ ability to engage in certain mergers, (d) the requirement that the Company maintain a Consolidated Interest Coverage Ratio of no less than 3.00:1.00 as of the end of any fiscal quarter and (e) the requirement that the Company maintain: a Consolidated Total Leverage Ratio of no more than (i) 3.50:1.00 for the quarter ended December 31, 2023, (ii) 4.00:1.00 for each of the quarters ended September 30, 2023 and December 31, 2023, (iii) 3.75:1.00 for each of the first, second and fourth fiscal quarters of each year (other than 2023) and (iv) 4.00:1:00 for the third fiscal quarter of each year (other than 2023).
On February 20, 2026, the Company amended and restated the Amended Revolving Credit Agreement which extended the maturity date through February 2031 and revised the aggregate principal amount to $1.1 billion. Substantially all of the other terms of the Amended Revolving Credit Agreement remain the same. The February 2026 Amended Revolving Credit Agreement contains affirmative and negative covenants typical of this type of facility, including: (a) restrictions on the Company’s and its domestic subsidiaries’ ability to allow liens on their assets, (b) restrictions on the incurrence of indebtedness, (c) restrictions on the Company’s and certain of its subsidiaries’ ability to engage in certain mergers, (d) the requirement that the Company maintain a Consolidated Interest Coverage Ratio of no less than 3.00:1.00 as of the end of any fiscal quarter and (e) the requirement that the Company maintain: a Consolidated Total Leverage Ratio of no more than (i) 3.75:1.00 for each of the first, second and fourth fiscal quarters of each year and (ii) 4.00:1:00 for the third fiscal quarter of each year.
The Company was in compliance with all covenants under the Amended Revolving Credit Agreement as of and for the year ended December 28, 2025. The Company had no borrowings outstanding under this credit facility as of December 28, 2025.
In June 2025, the Company entered into an uncommitted money market line of credit agreement (the “Money Market Credit Facility”) to provide the Company with access to short-term cash advances with an aggregate principal amount of up to $100.0 million. The Money Market Credit Facility is intended to support the Company’s short-term liquidity needs, including working capital and general corporate purposes.
Under the terms of the Money Market Credit Facility, each loan borrowing is subject to the lender’s sole and absolute discretion with no obligation to fund and bears interest at a variable rate agreed upon at the time of each borrowing. The Money Market Credit Facility has no commitment fee or termination fee. Each advance under the Money Market Credit Facility has a maturity date of less than 90 days from the borrowing date, and the Company may voluntarily prepay any outstanding advances without premium or penalty, subject to reimbursement of actual breakage costs, if any. The Money Market Credit Facility may be terminated by the lender at any time upon written notice and is subject to customary representations, warranties, and covenants. There was no outstanding balance as of December 28, 2025.
The Company also has an agreement with a group of banks providing a commercial paper program (the “Program”). Under the Program, at the Company’s request and subject to market conditions, the banks may either purchase from the Company, or arrange for the sale by the Company of, unsecured commercial paper notes. Borrowings under the Program are supported by the aforementioned unsecured committed line of credit and the Company may issue notes from time to time up to an aggregate principal amount outstanding at any given time of $1.0 billion. The maturities of the notes may vary but may not exceed 397 days. The notes are sold under customary terms in the
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
commercial paper market and will be issued at a discount to par, or alternatively, will be sold at par and will bear varying interest rates based on a fixed or floating rate basis. The interest rates will vary based on market conditions and the ratings assigned to the notes by the credit rating agencies at the time of issuance. Subject to market conditions, the Company intends to utilize the Program as its primary short-term borrowing facility and does not intend to sell unsecured commercial paper notes in excess of the available amount under the revolving credit agreement. If, for any reason, the Company is unable to access the commercial paper market, the Company intends to use the revolving credit agreement to meet the Company's short-term liquidity needs. As of December 28, 2025 and December 29, 2024, the Company did not have any notes outstanding under the Program.
Hasbro had unused open letters of credit and related instruments of approximately $11.7 million and $11.3 million at December 28, 2025 and December 29, 2024, respectively.
Supplier Finance Program
The Company also has a supplier finance program which provides participating suppliers the option of receiving payment in advance of an invoice due date, to be paid by certain administering banks, on the basis of invoices that the Company has confirmed as valid and approved. The Company’s obligation is to make payment in the invoice amount negotiated with participating suppliers, to the administering banks on the invoice due date. The Company’s suppliers are not required to participate in the supplier finance program. The early payment transactions between the Company’s supplier and the administering bank are subject to an agreement between those parties, and the Company does not participate in any financial aspect of the agreements between the Company’s suppliers and the administering banks. The Company has not pledged any assets to the administering bank under the supplier financing program. The Company or the administering bank may terminate the agreement upon at least 30 days’ written notice.
The amount of obligations confirmed under the program that remain unpaid by the Company were $45.7 million, and $66.2 million as of December 28, 2025 and December 29, 2024, respectively. These obligations are presented within Accounts payable in our Consolidated Balance Sheets and the activity related to this program is reflected within the operating activities section of the Consolidated Statements of Cash Flows. A summary of the activity related to the obligations are as follows:
| (In millions) | 2025 | 2024 | ||||||||||||
| Balance, beginning of period | $ | 66.2 | $ | 43.3 | ||||||||||
| Additions | 335.4 | 387.7 | ||||||||||||
| Settlements | (355.9) | (364.8) | ||||||||||||
| Balance, ending of period | $ | 45.7 | $ | 66.2 |
(13) Income Taxes
The components of (Loss) earnings before income taxes, determined by tax jurisdiction, are as follows:
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| United States | $ | (160.8) | $ | 325.2 | $ | (356.9) | |||||||||||
| International | 58.8 | 171.8 | (1,352.2) | ||||||||||||||
| Total (loss) earnings before income taxes | $ | (102.0) | $ | 497.0 | $ | (1,709.1) |
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
Income taxes attributable to (Loss) earnings before income taxes are:
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Current: | |||||||||||||||||
| United States | $ | 2.2 | $ | 47.0 | $ | (29.0) | |||||||||||
| State and local | (0.6) | 11.0 | (6.4) | ||||||||||||||
| International | 56.0 | 65.2 | 57.6 | ||||||||||||||
| 57.6 | 123.2 | 22.2 | |||||||||||||||
| Deferred: | |||||||||||||||||
| United States | 125.9 | (2.2) | (36.3) | ||||||||||||||
| State and local | 21.3 | (9.7) | (3.0) | ||||||||||||||
| International | 11.4 | (8.7) | (204.2) | ||||||||||||||
| 158.6 | (20.6) | (243.5) | |||||||||||||||
| Total tax expense (benefit) | $ | 216.2 | $ | 102.6 | $ | (221.3) |
The following table presents the 2025 rate reconciliation between Income tax expense and statutory expectations, after the adoption of ASU 2023-09:
| 2025 | ||||||||||||||
| (In millions) | Amount | Percent | ||||||||||||
| U.S. federal statutory tax rate | $ | (21.4) | 21.0 | % | ||||||||||
| State and local income taxes, net of federal income tax effect(1) | 16.3 | (16.0) | ||||||||||||
| Foreign tax effects | ||||||||||||||
| Canada | ||||||||||||||
| Difference in statutory tax rate | (0.3) | 0.3 | ||||||||||||
| Quebec income taxes | 1.7 | (1.7) | ||||||||||||
| Other | 0.6 | (0.6) | ||||||||||||
| Switzerland | ||||||||||||||
| Difference in statutory tax rate | (22.7) | 22.3 | ||||||||||||
| Canton income taxes | 10.2 | (10.0) | ||||||||||||
| Swiss deferred tax asset translation | (4.0) | 3.9 | ||||||||||||
| Nontaxable income | (2.1) | 2.0 | ||||||||||||
| Other | (0.7) | 0.7 | ||||||||||||
| China | ||||||||||||||
| Difference in statutory tax rate | 0.5 | (0.5) | ||||||||||||
| Withholding tax | 8.0 | (7.8) | ||||||||||||
| Other | 0.3 | (0.3) | ||||||||||||
| Germany | ||||||||||||||
| Difference in statutory tax rate | (0.1) | 0.1 | ||||||||||||
| Pension adjustment | (1.3) | 1.3 | ||||||||||||
| Other | (0.6) | 0.6 | ||||||||||||
| United Kingdom | ||||||||||||||
| Difference in statutory tax rate | 1.9 | (1.9) | ||||||||||||
| Change in valuation allowance | 3.9 | (3.8) | ||||||||||||
| Tax credits | (13.4) | 13.1 | ||||||||||||
| Write-off of intangibles | 4.5 | (4.4) | ||||||||||||
| Nondeductible expenses | 7.0 | (6.8) | ||||||||||||
| Share-based compensation | (0.4) | 0.4 | ||||||||||||
| Other | 0.6 | (0.6) |
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
| 2025 | ||||||||||||||
| (In millions) | Amount | Percent | ||||||||||||
| Mexico | ||||||||||||||
| Difference in statutory tax rate | 3.3 | (3.2) | ||||||||||||
| Nondeductible Items | 2.2 | (2.2) | ||||||||||||
| Withholding tax | 2.0 | (2.0) | ||||||||||||
| Other | 0.1 | (0.1) | ||||||||||||
| Netherlands | ||||||||||||||
| Difference in statutory tax rate | 0.1 | (0.1) | ||||||||||||
| Nondeductible Items | 1.3 | (1.3) | ||||||||||||
| Other Foreign Jurisdictions | 1.9 | (1.9) | ||||||||||||
| Effect of cross-border tax laws | ||||||||||||||
| Subpart F inclusion | 9.5 | (9.3) | ||||||||||||
| Global Intangible Low-Taxed Income (GILTI), net of Sec. 250 deduction | 5.7 | (5.6) | ||||||||||||
| Foreign-derived intangible income (FDII) deduction | (4.2) | 4.2 | ||||||||||||
| Withholding tax | 1.6 | (1.6) | ||||||||||||
| Tax credits | ||||||||||||||
| Foreign tax credits | (14.2) | 13.9 | ||||||||||||
| Research & development tax credits | (6.4) | 6.3 | ||||||||||||
| Change in valuation allowance | 5.4 | (5.3) | ||||||||||||
| Changes in unrecognized tax benefits | 2.9 | (2.8) | ||||||||||||
| Nontaxable or nondeductible items | ||||||||||||||
| Goodwill impairment | 209.8 | (205.8) | ||||||||||||
| Officer's compensation | 9.8 | (9.6) | ||||||||||||
| Share-based compensation | 1.7 | (1.7) | ||||||||||||
| Other | (1.9) | 1.8 | ||||||||||||
| Other adjustments | ||||||||||||||
| Post-disposition tax refund | (2.3) | 2.3 | ||||||||||||
| Other | (0.6) | 0.6 | ||||||||||||
| Effective tax rate | $ | 216.2 | (212.1) | % |
(1) State taxes in California , New York and Tennessee made up the majority (greater than 50%) of the tax effect in this category.
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
The following table presents the reconciliation of the statutory United States federal income tax rate to Hasbro’s effective income tax rate during 2024 and 2023, prior to the adoption of ASU 2023-09:
| 2024 | 2023 | |||||||||||||
| Statutory income tax rate | 21.0 | % | 21.0 | % | ||||||||||
| State and local income taxes, net | 0.2 | 0.5 | ||||||||||||
| Tax on international earnings | 1.3 | 6.7 | ||||||||||||
| Domestic tax on foreign earnings | (4.0) | 1.3 | ||||||||||||
| Change in unrecognized tax benefits | — | (0.3) | ||||||||||||
| U.S. capital loss | 6.6 | 22.0 | ||||||||||||
| Change in valuation allowance | (4.5) | (23.3) | ||||||||||||
| Share-based compensation | 0.5 | (0.3) | ||||||||||||
| Research and development tax credits | (1.5) | 0.3 | ||||||||||||
| Officers' compensation | 0.9 | (0.3) | ||||||||||||
| Loss on disposal of business | 1.0 | (3.4) | ||||||||||||
| Goodwill impairment | — | (11.8) | ||||||||||||
| Other, net | (0.8) | 0.5 | ||||||||||||
| Effective tax rate | 20.7 | % | 12.9 | % |
The effective income tax rate for 2025 was (212.1)% compared to 20.7% for 2024. The change in the effective income tax rate was primarily driven by a non-cash impairment of goodwill recorded in 2025 with no material tax benefit. The increase in the provision for income taxes was primarily due to U.S. Global Intangible Low-Taxed Income ("GILTI") and Subpart F inclusions, as well as additional valuation allowances generated in 2025.
Components of deferred income tax expense (benefit) arise from various temporary differences and relate to items included in the Consolidated Statements of Operations as well as items recognized in Other comprehensive earnings (loss).
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities as of December 28, 2025 and December 29, 2024 are as follows:
| (In millions) | 2025 | 2024 | |||||||||
| Deferred tax assets: | |||||||||||
| Loss and credit carryforwards | $ | 451.5 | $ | 426.6 | |||||||
| Depreciation and amortization of long-lived assets | 186.1 | 183.1 | |||||||||
| Other compensation | 46.4 | 51.9 | |||||||||
| Accounts receivable | 32.2 | 31.0 | |||||||||
| Accrued expenses | 16.9 | 18.8 | |||||||||
| Inventories | 13.8 | 17.4 | |||||||||
| Royalty expense | 10.1 | 3.8 | |||||||||
| Operating leases | 9.8 | 7.2 | |||||||||
| Pension | 7.3 | 7.3 | |||||||||
| Postretirement benefits | 5.8 | 5.7 | |||||||||
| Interest rate hedge | 4.2 | 4.4 | |||||||||
| Tax sharing agreement | 0.5 | 0.3 | |||||||||
| Deferred revenue | — | 0.3 | |||||||||
| Capitalized research and experimentation | — | 116.5 | |||||||||
| Interest expense limitation | — | 15.6 |
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
| (In millions) | 2025 | 2024 | |||||||||
| Other | 3.1 | 0.8 | |||||||||
| Deferred tax assets, gross | 787.7 | 890.7 | |||||||||
| Deferred tax liabilities: | |||||||||||
| Depreciation and amortization of long-lived assets | 76.5 | 94.8 | |||||||||
| Capitalized research and experimentation | 33.4 | — | |||||||||
| Operating leases | 6.4 | 4.9 | |||||||||
| Prepaid expenses | 5.5 | 4.1 | |||||||||
| Equity method investment | — | 1.9 | |||||||||
| Other | 12.0 | 14.6 | |||||||||
| Deferred tax liabilities, gross | 133.8 | 120.3 | |||||||||
| Valuation allowance | (426.4) | (412.5) | |||||||||
| Deferred income taxes, net | $ | 227.5 | $ | 357.9 |
As of December 28, 2025, the Company has loss and credit carryforwards of $451.5 million, compared to $426.6 million at December 29, 2024. The most significant amount of the loss and credit carryforwards as of December 28, 2025 and December 29, 2024 relates to U.S. capital losses of $338.4 million resulting from the sale of the eOne Film and TV business during 2023. Other significant loss and credit carryforwards relate to tax attributes of entities that have historically operated at losses in certain jurisdictions, as well as certain state tax attributes. The U.S. capital loss has a carryforward period of five years and will expire if not utilized before 2029. Some U.S. federal, state and international loss and credit carryforwards expire at various dates throughout 2026 while others have an indefinite carryforward period.
The recoverability of these future tax deductions and credits is evaluated by assessing the adequacy of future expected taxable income, of the appropriate character, from all sources, including taxable income in prior carryback years, reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies. To the extent the Company does not consider it more likely than not that a deferred tax asset will be recovered, a valuation allowance is generally established. To the extent that a valuation allowance was established and it is subsequently determined that it is more likely than not that the deferred tax assets will be recovered, the change in the valuation allowance is recognized in the Consolidated Statements of Operations.
The Company has a valuation allowance for certain net deferred tax assets at December 28, 2025 of $426.4 million, compared to $412.5 million at December 29, 2024. The change primarily pertains to adjustments to the U.S. capital loss resulting from the sale of the Company's eOne Film and TV business, for which the Company recorded a full valuation allowance as of December 28, 2025.
The movement in the deferred tax valuation allowance is as follows:
| (In millions) | 2025 | 2024 | |||||||||
| Balance, beginning of period | $ | (412.5) | $ | (432.0) | |||||||
| Provisions/charges to income | (11.6) | 19.8 | |||||||||
| Amounts charged to other accounts | 0.2 | (2.5) | |||||||||
| Foreign currency impact | (2.5) | 2.2 | |||||||||
| Balance, end of period | $ | (426.4) | $ | (412.5) |
The Company’s net deferred income taxes are recorded in the Consolidated Balance Sheets as follows:
| (In millions) | 2025 | 2024 | |||||||||
| Other assets | $ | 286.8 | $ | 424.6 | |||||||
| Other liabilities | (59.3) | (66.7) | |||||||||
| Net deferred income taxes | $ | 227.5 | $ | 357.9 |
The Company has significant cash needs outside the U.S. and continues to consistently monitor and analyze its global working capital and cash requirements. However, we intend to repatriate substantially all of our accumulated
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
foreign earnings when appropriate. As of December 28, 2025, we have recorded $5.3 million of foreign withholding and U.S. state income tax liability. The Company has not finalized the timing of any actual cash distributions or the specific amounts and therefore we could still be subject to some additional foreign withholding taxes and U.S. state income taxes. We will record these additional tax effects, if any, in the period that we complete our analysis and are able to make a reasonable estimate.
A reconciliation of unrecognized tax benefits, excluding potential interest and penalties is as follows:
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Balance, beginning of period | $ | 36.1 | $ | 39.9 | $ | 77.8 | |||||||||||
| Gross increases in current period tax positions | 2.9 | 3.6 | 3.8 | ||||||||||||||
| Gross increases in prior period tax positions | 0.3 | 0.1 | 11.9 | ||||||||||||||
| Gross decrease from disposition | — | — | (10.4) | ||||||||||||||
| Gross decreases in prior period tax positions | — | (1.6) | (23.4) | ||||||||||||||
| Decreases related to settlements with tax authorities | — | (1.5) | (8.4) | ||||||||||||||
| Decreases from the expiration of statutes of limitations | (1.6) | (4.4) | (11.4) | ||||||||||||||
| Balance, end of period | $ | 37.7 | $ | 36.1 | $ | 39.9 |
Unrecognized tax benefits are recorded within Other liabilities, Prepaid expenses and Other current assets, and Other assets in the Company's Consolidated Balance Sheets. If recognized, these tax benefits may have affected our income tax provision for fiscal years 2025, 2024, and 2023 by approximately $47.0 million, $44.0 million, and $46.0 million, respectively.
During 2025, 2024, and 2023, the Company recognized $1.8 million, $2.9 million, and $5.8 million, respectively, of potential interest and penalties, which are included as a component of Income tax expense (benefit) on the Consolidated Statements of Operations. As of December 28, 2025, December 29, 2024, and December 31, 2023, the Company had accrued potential interest and penalties of $9.1 million, $7.7 million, and $6.2 million, respectively.
The Company and its subsidiaries file income tax returns in the U.S. and various state and international jurisdictions. In the normal course of business, the Company is regularly audited by U.S. federal, state and local and international tax authorities in various tax jurisdictions. The Company is no longer subject to U.S. federal income tax examinations for years before 2017. With few exceptions, the Company is no longer subject to U.S. state or local and non-U.S. income tax examinations by tax authorities in its major jurisdictions for years before 2016. The Company is currently under income tax examination by the Internal Revenue Service for the tax years 2017 and 2018 and in several U.S. state and local and non-U.S. jurisdictions.
The amount of cash taxes paid, net of refunds, by the Company during 2025 is as follows:
| (In millions) | 2025 | |||||||
| U.S. federal | $ | 105.8 | ||||||
| U.S. state and local (1) | 7.1 | |||||||
| Foreign | ||||||||
| United Kingdom | 35.3 | |||||||
| Mexico | 17.7 | |||||||
| China | 11.0 | |||||||
| Other foreign jurisdictions | 19.9 | |||||||
| Total cash taxes paid, net of refunds | $ | 196.8 |
(1) No single state or local jurisdiction accounts for more than 5% of the total income taxes paid.
We are subject to income and other taxes in the U.S. (federal and state) and foreign jurisdictions. Changes to these laws or regulations may impact our tax liabilities. On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law with certain provisions effective in 2025 and other provisions becoming effective in 2026. The OBBBA provisions include the restoration of full expensing for domestic research and development expenses, reinstatement of accelerated depreciation on qualified capital expenditures, and modifications to the international tax framework, among other items. The OBBBA also provides for an election to accelerate the deduction of the remaining unamortized domestic research and development expenses capitalized previously. For fiscal year 2025,
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
the primary impact of the OBBBA to the Company was the accelerated expensing of domestic research and development costs which decreased our income eligible for foreign-derived intangible income ("FDII"), reduced our deferred tax assets, and reduced our current income tax liability. Other OBBBA changes did not have a material impact on the Company's consolidated financial statements in the current year, we are currently assessing the impact of OBBBA on the consolidated financial statements for future periods.
Tax laws are regularly being re-examined and evaluated globally. The Organisation for Economic Co-operation and Development ("OECD") has a framework to implement a global minimum corporate tax of 15% for companies with global revenues and profits above certain thresholds (referred to as "Pillar 2"), effective for tax years beginning in 2024. Many non-U.S. jurisdictions have enacted legislation into their domestic laws to align with the OECD's Pillar 2 framework. On January 5, 2026, the OECD introduced new guidance including a "Side-by-Side Safe Harbor" for U.S. and other multinational companies where domestic and international tax systems meet certain requirements to coexist with Pillar 2. Under the new guidance, US-parented companies would be exempt from certain aspects of the global minimum tax regime. The package includes a permanent simplified effective tax rate safe harbor and a substance-based tax incentive safe harbor. Additionally, the package extends the transitional country-by-country reporting safe harbor through to 2027. The updated model rules will need to be incorporated into local tax legislation to become effective. We will continue to evaluate the impacts of Pillar 2 in our non-U.S. tax jurisdictions. The Pillar 2 rules did not have a material impact on the Company's financial statements for 2024 and 2025.
(14) Capital Stock
The Company has a long history of increasing shareholder value through its share repurchase program. As part of this initiative, the Company's Board of Directors adopted numerous shares repurchase authorizations. In February 2026, the Company announced that its Board of Directors authorized the repurchase of up to $1.0 billion in Common Stock. This authorization replaces and supersedes all prior approved share repurchase authorization and has no expiration date. The Company has no obligation to repurchase shares under the authorization and the time, actual number, and the value of the shares which are repurchased will depend on a number of factors, including the price of the Company’s common stock. No shares were repurchased during 2025 and 2024.
(15) Fair Value of Financial Instruments
The Company measures certain financial instruments at fair value. The fair value hierarchy consists of three levels:
-
Level 1 fair values are based on quoted market prices in active markets for identical assets or liabilities that the entity has the ability to access;
-
Level 2 fair values are those based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities;
-
Level 3 fair values are based on inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
There have been no transfers between levels within the fair value hierarchy.
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
As of December 28, 2025 and December 29, 2024, the Company had the following assets and liabilities measured at fair value in its Consolidated Balance Sheets:
| Fair Value | Fair Value Measurements Using: | ||||||||||||||||||||||
| (In millions) | Level 1 | Level 2 | Level 3 | ||||||||||||||||||||
| December 28, 2025 | |||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Available-for-sale securities | $ | 106.0 | $ | 106.0 | $ | — | $ | — | |||||||||||||||
| Derivative financial instruments | 2.0 | — | 2.0 | — | |||||||||||||||||||
| $ | 108.0 | $ | 106.0 | $ | 2.0 | $ | — | ||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Derivative financial instruments | $ | 8.7 | $ | — | $ | 8.7 | $ | — | |||||||||||||||
| December 29, 2024 | |||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Available-for-sale securities | $ | 0.6 | $ | 0.6 | $ | — | $ | — | |||||||||||||||
| Derivative financial instruments | 9.7 | — | 9.7 | — | |||||||||||||||||||
| $ | 10.3 | $ | 0.6 | $ | 9.7 | $ | — | ||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
| Derivative financial instruments | $ | 1.7 | $ | — | $ | 1.7 | $ | — | |||||||||||||||
As of December 28, 2025, the Company held $106.0 million of available-for-sale securities, of which $105.4 million consisted of U.S. Treasury Bills. These investments are recorded at fair value within Short-term investments and Prepaid expenses and other current assets in the Company's Consolidated Balance Sheet, with an insignificant amount of unrealized gains and losses excluded from net income and deferred as components of Other comprehensive earnings (loss), net of related tax effects, until realized.
The Company’s derivatives primarily consist of foreign currency forward and option contracts. The Company uses current forward rates of the respective foreign currencies to measure the fair value of these contracts. There were no changes in these valuation techniques during 2025.
(16) Share-Based Awards
The Company has reserved 6.5 million shares of its common stock for issuance upon exercise of options and other awards granted or to be granted under stock incentive plans for employees and for non-employee members of the Board of Directors (collectively, the “Plans”). These awards generally vest and are expensed in equal annual amounts over three years. The plans provide that options be granted at exercise prices not less than the market value of the underlying common stock on the date the option is granted and options and share awards are adjusted for such changes as stock splits and stock dividends. Options are exercisable for periods of no more than seven years after date of grant. Upon exercise in the case of stock options, grant in the case of restricted stock or vesting in the case of performance based contingent stock and restricted stock unit grants, shares are issued out of available treasury shares. The Company’s current plan permits the granting of awards in the form of stock, stock appreciation rights, stock awards and cash awards in addition to stock options.
Total compensation expense related to stock options, restricted stock units, including those awards made to non-employee members of its Board of Directors, and stock performance awards during 2025, 2024 and 2023 was $80.4 million, $50.8 million and $71.9 million, respectively, and $72.3 million, $43.6 million and $62.7 million, respectively, after tax effects. Total share-based compensation expense was recorded as follows:
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Product development | $ | 13.5 | $ | 10.2 | $ | 7.0 | |||||||||||
| Selling, distribution and administration | 66.9 | 40.6 | 64.9 | ||||||||||||||
| Total share-based compensation expense before income taxes | $ | 80.4 | $ | 50.8 | $ | 71.9 |
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
Total share-based compensation expense, net of performance adjustments, by award type is as follows:
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Stock performance awards | $ | 20.4 | $ | (6.4) | $ | 15.8 | |||||||||||
| Restricted stock units | 56.0 | 51.0 | 47.8 | ||||||||||||||
| Stock options | 2.4 | 4.4 | 7.0 | ||||||||||||||
| Non-employee awards | 1.6 | 1.8 | 1.3 | ||||||||||||||
| Total share-based compensation expense before income taxes | $ | 80.4 | $ | 50.8 | $ | 71.9 |
Stock Performance Awards
In 2025, 2024 and 2023, as part of its annual equity grant to executive officers and certain other employees, the Company issued contingent stock performance awards (the “Stock Performance Awards”). These awards provide the recipients with the ability to earn shares of the Company’s common stock based on the Company’s achievement of stated cumulative operating performance targets over the three fiscal years ended December 2027, December 2026, and December 2025 for the 2025, 2024 and 2023 awards, respectively. The 2023 Stock Performance Awards are measured based on achieving targets set for diluted earnings per share and return on invested capital ("ROIC"), in addition to a relative Total Shareholder Return ("TSR") modifier ranking as compared to the Standard & Poor's ("S&P") 500, to determine the number of shares earned at the end of the performance period. The 2024 and 2025 Stock Performance Awards are measured based on achieving targets set for diluted earnings per share, in addition to a TSR modifier ranking as compared to the S&P 500, to determine the number of shares earned at the end of the performance period. The ultimate amount of the awards may vary from 0% to 250% of the target number of shares, depending on the cumulative results achieved.
Stock performance award activity during 2025 was as follows:
| (In millions, except per share data) | Shares | Weighted Average Fair Value on Grant Date | |||||||||
| Outstanding, beginning of year | 0.9 | $ | 61.07 | ||||||||
| Granted | 0.2 | $ | 61.24 | ||||||||
| Forfeited | (0.3) | $ | 71.70 | ||||||||
| Vested | — | $ | 87.40 | ||||||||
| Outstanding, end of year | 0.8 | $ | 55.15 |
Stock Performance Awards are valued at the market value of the underlying common stock at the dates of grant and are expensed over the performance period. On a periodic basis, the Company reviews the actual and forecasted performance of the Company against the stated targets for each award. The total expense is adjusted upward or downward based on the expected number of shares to be issued as defined in the respective stock performance award agreement. If minimum targets as detailed under the award are not met, no additional compensation expense will be recognized and any previously recognized compensation expense will be reversed. During 2025, 2024 and 2023, the Company recognized expense (income), net of performance adjustments, of $20.4 million, $(6.4) million and $15.8 million, respectively, relating to Stock Performance Awards. During 2024, the Company corrected a prior period error associated with a $18.1 million benefit related to the reversal of stock compensation expense for the Company's performance stock awards that should have been recorded during fiscal year 2023. Refer to Note 1, Summary of Significant Accounting Policies for additional information.
The total fair value of stock performance awards vested during 2025, 2024 and 2023 was $3.1 million, $10.2 million and $7.7 million, respectively. As of December 28, 2025, the amount of total unrecognized compensation cost related to these awards is approximately $27.8 million and the weighted average period over which this will be expensed is 21 months.
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
Restricted Stock Units
The Company, as part of its annual equity grant to executive officers and certain other employees, issues restricted stock or grants restricted stock units. These shares or units are nontransferable and subject to forfeiture or vesting for periods prescribed by the Company. These awards are valued at the market value of the underlying common stock at the date of grant and are subsequently amortized over the periods during which the restrictions lapse, generally three years. The total fair value of restricted stock units vested during 2025, 2024 and 2023 was $53.6 million, $47.3 million and $58.3 million, respectively. As of December 28, 2025, the amount of total unrecognized compensation cost related to restricted stock units is $92.0 million and the weighted average period over which this will be expensed is 24 months.
Restricted stock unit activity during 2025 was as follows:
| (In millions, except per share data) | Shares | Weighted-Average Fair Value on Grant Date | |||||||||
| Outstanding, beginning of year | 2.4 | $ | 56.04 | ||||||||
| Granted | 1.4 | $ | 63.14 | ||||||||
| Forfeited | (0.5) | $ | 55.86 | ||||||||
| Vested | (1.0) | $ | 58.31 | ||||||||
| Outstanding, end of year | 2.3 | $ | 59.41 |
Stock Options
Stock option activity during 2025 was as follows:
| (In millions, except per share data) | Options | Weighted-Average Exercise Price | |||||||||
| Outstanding, beginning of year | 1.5 | $ | 76.11 | ||||||||
| Granted | — | $ | — | ||||||||
| Exercised | (0.2) | $ | 55.78 | ||||||||
| Expired or forfeited | (0.6) | $ | 88.48 | ||||||||
| Outstanding, end of year | 0.7 | $ | 72.07 | ||||||||
| Exercisable, end of year | 0.6 | $ | 75.93 |
With respect to the 0.7 million outstanding options and 0.6 million options exercisable at December 28, 2025, the weighted average remaining contractual life of these options was 3.05 years and 2.42 years, respectively. The intrinsic value of the outstanding options and options exercisable at December 28, 2025 was $11.9 million and $7.8 million, respectively.
The Company uses the Black-Scholes valuation model in determining the fair value of stock options. The expected life of the options used in this calculation is the period of time the options are expected to be outstanding and has been determined based on historical exercise experience. The weighted average fair value of options granted in fiscal 2024 and 2023 was $11.74 and $12.73, respectively. There were no options granted in fiscal 2025 and only a de minimis amount granted in 2024. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions used for grants in the fiscal years 2025, 2024, and 2023:
| 2025 | 2024 | 2023 | |||||||||||||||
| Risk-free interest rate | N/A | 4.46 | % | 4.44 | % | ||||||||||||
| Expected dividend yield | N/A | 4.63 | % | 4.95 | % | ||||||||||||
| Expected volatility | N/A | 33 | % | 38 | % | ||||||||||||
| Expected option life | N/A | 3 years | 3 years |
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
The intrinsic values, which represent the difference between the fair market value on the date of exercise and the exercise price of the option, for the options exercised in fiscal 2025 and 2024 were $2.8 million and $1.1 million, respectively. No options were exercised during fiscal 2023.
As of December 28, 2025, the amount of total unrecognized compensation cost related to stock options was $0.3 million and the weighted average period over which this will be expensed is 2 months.
Non-Employee Awards
In 2025, 2024 and 2023, the Company granted 23,500, 30,700 and 28,000 shares of common stock, respectively, to its non-employee members of its Board of Directors. Of these shares, the receipt of 7,800 shares from the 2025 grant, 8,800 shares from the 2024 grant and 14,000 shares from the 2023 grant has been deferred to the date upon which the respective director ceases to be a member of the Company’s Board of Directors. These awards were valued at the market value of the underlying common stock at the date of grant and vested upon grant. In connection with these grants, compensation cost of $1.6 million, $1.8 million and $1.3 million was recorded in Selling, distribution and administration expense during 2025, 2024 and 2023, respectively.
(17) Retirement Plans
Pension and Postretirement Benefits
The Company recognizes an asset or liability for each of its defined benefit pension plans equal to the difference between the projected benefit obligation of the plan and the fair value of the plan’s assets. Actuarial gains and losses and prior service costs that have not yet been included in income are recognized in the Consolidated Balance Sheets in AOCL. Reclassifications to earnings (losses) from AOCL related to pension and postretirement plans are recorded to Other (income) expense.
Expenses related to the Company’s defined benefit pension plans for 2025, 2024 and 2023 were approximately $4.7 million, $3.0 million and $4.0 million, respectively, and were recorded within Other (income) expense.
United States Plans
The Company sponsors a defined benefit retirement plan, which pays benefits to eligible employees at the time of retirement, using actuarial formulas based upon a participant’s years of credited service and compensation. The plan is closed and frozen to all employees. The Company also provides certain postretirement health care and life insurance benefits to eligible employees, primarily employees who retired prior to January 1, 2020. Amounts related to the defined benefit retirements plan and other postretirement plans recognized in the Company’s consolidated financial statements are determined on an actuarial basis.
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
Reconciliations of the beginning and ending balances for the projected benefit obligation, the fair value of plan assets and the funded status are included below.
| Pension | Postretirement | ||||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Change in Projected Benefit Obligation: | |||||||||||||||||||||||
| Projected benefit obligation, beginning of year | $ | 27.7 | $ | 30.1 | $ | 19.6 | $ | 20.2 | |||||||||||||||
| Interest cost | 1.5 | 1.5 | 1.0 | 1.0 | |||||||||||||||||||
| Actuarial loss (gain) | 1.8 | (0.4) | 0.3 | (0.9) | |||||||||||||||||||
| Benefits paid | (3.1) | (3.5) | (1.6) | (1.6) | |||||||||||||||||||
| Curtailments | — | — | 0.1 | 0.9 | |||||||||||||||||||
| Projected benefit obligation, end of year | $ | 27.9 | $ | 27.7 | $ | 19.4 | $ | 19.6 | |||||||||||||||
| Accumulated benefit obligation, end of year | $ | 27.9 | $ | 27.7 | $ | 19.4 | $ | 19.6 | |||||||||||||||
| Reconciliation of Funded Status: | |||||||||||||||||||||||
| Projected benefit obligation | $ | (27.9) | $ | (27.7) | $ | (19.4) | $ | (19.6) | |||||||||||||||
| Fair value of plan assets | — | — | — | — | |||||||||||||||||||
| Funded status | (27.9) | (27.7) | (19.4) | (19.6) | |||||||||||||||||||
| Unrecognized prior service credit | — | — | — | (0.2) | |||||||||||||||||||
| Unrecognized net loss (earnings) | 5.7 | 4.1 | (2.1) | (2.5) | |||||||||||||||||||
| Net amount | $ | (22.2) | $ | (23.6) | $ | (21.5) | $ | (22.3) | |||||||||||||||
| Funded Status recorded on the Consolidated Balance Sheets: | |||||||||||||||||||||||
| Accrued liabilities | $ | (2.8) | $ | (2.8) | $ | (1.5) | $ | (1.6) | |||||||||||||||
| Other liabilities | (25.1) | (24.9) | (17.9) | (18.0) | |||||||||||||||||||
| Accumulated other comprehensive loss | 5.7 | 4.1 | (2.1) | (2.7) | |||||||||||||||||||
| Net amount | $ | (22.2) | $ | (23.6) | $ | (21.5) | $ | (22.3) |
Assumptions used to determine the year-end pension and postretirement benefit obligations are as follows:
| 2025 | 2024 | ||||||||||
| Pension: | |||||||||||
| Discount rate | 5.24 | % | 5.67 | % | |||||||
| Mortality table | PriH-2012/Scale MP - 2021 | PriH-2012/Scale MP - 2021 | |||||||||
| Postretirement: | |||||||||||
| Discount rate | 5.42 | % | 5.74 | % | |||||||
| Health care cost trend rate assumed for next year | 7.50 | % | 7.00 | % | |||||||
| Rate to which the cost trend rate is assumed to decline (ultimate trend rate) | 5.00 | % | 5.00 | % | |||||||
| Year that the rate reaches the ultimate trend rate | 2036 | 2033 |
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
The following presents detail of the components of the net periodic benefit cost:
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Pension: | |||||||||||||||||
| Interest cost | $ | 1.5 | $ | 1.5 | $ | 1.6 | |||||||||||
| Amortization of actuarial loss | 0.1 | 0.1 | — | ||||||||||||||
| Net periodic benefit cost | $ | 1.6 | $ | 1.6 | $ | 1.6 | |||||||||||
| Postretirement: | |||||||||||||||||
| Interest cost | $ | 1.0 | $ | 1.0 | $ | 1.1 | |||||||||||
| Amortization of service credit | (0.2) | (0.2) | (0.3) | ||||||||||||||
| Amortization of actuarial gain | — | (0.1) | (0.2) | ||||||||||||||
| Curtailment/settlement gain | — | (0.2) | — | ||||||||||||||
| Net periodic benefit cost | $ | 0.8 | $ | 0.5 | $ | 0.6 |
Assumptions used to determine net periodic benefit cost of the pension plans and postretirement plan is as follows:
| 2025 | 2024 | 2023 | |||||||||||||||
| Pension: | |||||||||||||||||
| Discount rate | 5.67 | % | 5.43 | % | 5.61 | % | |||||||||||
| Postretirement: | |||||||||||||||||
| Discount rate | 5.74 | % | 5.41 | % | 5.58 | % | |||||||||||
| Health care cost trend rate assumed for next year | 7.00 | % | 6.75 | % | 7.00 | % | |||||||||||
| Ultimate trend rate | 5.00 | % | 5.00 | % | 5.00 | % | |||||||||||
| Year that the rate reaches the ultimate trend rate | 2033 | 2031 | 2031 |
During fiscal 2026, the Company expects to make contributions of $2.9 million and $1.6 million for the defined benefit pension plans and post-retirement plans, respectively, primarily to fund benefit payments. Expected benefit payments under the defined benefit pension plans and the postretirement benefit plans for the next five years subsequent to 2025 and in the aggregate for the following five years are as follows:
| (In millions) | Pension | Postretirement | |||||||||
| 2026 | $ | 2.9 | $ | 1.6 | |||||||
| 2027 | $ | 2.8 | $ | 1.6 | |||||||
| 2028 | $ | 2.7 | $ | 1.5 | |||||||
| 2029 | $ | 2.6 | $ | 1.5 | |||||||
| 2030 | $ | 2.5 | $ | 1.5 | |||||||
| 2031 through 2035 | $ | 11.1 | $ | 6.7 |
International Plans
Pension coverage for employees of the Company’s international subsidiaries is provided, to the extent deemed appropriate, through separate defined benefit and defined contribution plans. As of December 28, 2025 and December 29, 2024, the defined benefit plans had total projected benefit obligations of $79.2 million and $79.2 million, respectively, and fair values of plan assets of $73.9 million and $71.6 million, respectively. Substantially all of the plan assets are invested in equity and fixed income securities. The pension expense related to these plans was $2.2 million, $0.8 million and $1.3 million in 2025, 2024 and 2023, respectively. In fiscal year 2025, the Company expects an immaterial amount of unrecognized net losses, amortization of prior service costs and unrecognized transition obligation to be included as a component of net periodic benefit cost.
Expected benefit payments under the international defined benefit pension plans for the five years subsequent to 2025 and in the aggregate for the five years thereafter are as follows: 2026: $3.1 million; 2027: $3.3 million; 2028: $4.0 million; 2029: $3.7 million; 2030: $3.9 million; and 2031 through 2035: $22.4 million.
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
Post-employment Benefits
The Company also has several plans covering certain groups of employees, which may provide benefits to such employees following their period of active employment but prior to their retirement. These plans include certain severance plans which provide benefits to employees involuntarily terminated and certain plans which continue the Company’s health and life insurance contributions for employees who have left the Company under terms of its long-term disability plan.
Defined Contribution Plans
The Company maintains defined contribution savings plans for the benefit of its eligible employees. The expense recognized for these plans was $42.8 million, $39.5 million, and $40.9 million in 2025, 2024 and 2023, respectively.
(18) Leases
The Company has operating lease agreements for offices and certain types of equipment and vehicles. The operating leases have remaining terms of 1 to 13 years, some of which include options to extend lease terms or options to terminate current lease terms at certain times, subject to notification requirements set out in the lease agreement. Payments under certain of the lease agreements may be subject to adjustment based on a consumer price index or other inflationary indices. Any adjustments to these payments based on the related indices is recorded to expense as incurred.
The Company has elected the short-term lease practical expedient in accordance with ASC Topic 842*,* Leases (ASC Topic 842) that allows entities to recognize lease payments on a straight-line basis over the lease term for leases with a term of 12 months or less. Lease expense recognized for such leases was $0.4 million, $0.5 million, and $0.6 million for the years ended 2025, 2024 and 2023, respectively. Real estate taxes, insurance and maintenance expenses are generally obligations of the Company. The Company capitalizes non-lease components for equipment leases, but expenses non-lease components as incurred for real estate, which amounted to $8.6 million, $8.2 million, and $11.3 million in 2025, 2024 and 2023, respectively.
Operating lease costs for capitalized leases amounted to $32.8 million, $35.4 million and $44.2 million for each of the years ended 2025, 2024 and 2023, respectively. During 2025, 2024 and 2023, rent expense for arrangements that do not qualify as leases under ASC Topic 842 amounted to $28.2 million, $26.4 million, and $33.4 million, respectively. The Company has a de minimis amount of finance leases.
All leases expire prior to 2038. Operating leases often contain renewal options. In those locations in which the Company continues to operate, management expects that, in the normal course of business, leases that expire will be renewed or replaced by leases on other properties.
As of December 28, 2025, the Company has entered into significant new leases that have not yet commenced with estimated aggregated future lease payments within the initial lease terms of approximately $200.3 million. These leases are expected to commence during 2026, with initial lease terms ranging from 10 years to 12 years.
Information related to the Company's operating leases are as follows:
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Cash outflows for amounts included in the measurement of lease liabilities | $ | 37.9 | $ | 40.0 | $ | 48.6 | |||||||||||
| Right-of-use assets obtained in exchange for lease obligations, net of modifications | $ | 12.7 | $ | 31.7 | $ | 87.8 | |||||||||||
| Weighted average remaining lease term | 7.4 years | 7.6 years | 7.1 years | ||||||||||||||
| Weighted average discount rate | 4.0 | % | 4.0 | % | 3.8 | % |
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
The following is a reconciliation of future undiscounted cash flows to the operating liabilities, and the related right-of-use assets, included in our Consolidated Balance Sheets as of December 28, 2025:
| (In millions) | 2025 | ||||
| 2026 | $ | 36.4 | |||
| 2027 | 27.4 | ||||
| 2028 | 23.0 | ||||
| 2029 | 10.1 | ||||
| 2030 | 7.3 | ||||
| Thereafter | 49.2 | ||||
| Total future lease payments | 153.4 | ||||
| Present value discount | 22.0 | ||||
| Present value of future operating lease payments | 131.4 | ||||
| Less current portion of operating lease liabilities (1) | 30.6 | ||||
| Non-current operating lease liability (2) | $ | 100.8 | |||
| Operating lease right-of-use assets, net (3) | $ | 105.6 |
(1) Included in Accrued liabilities on the Consolidated Balance Sheets
(2) Included in Other liabilities on the Consolidated Balance Sheets
(3) Included in Property, plant and equipment on the Consolidated Balance Sheets
(19) Derivative Financial Instruments
The Company uses foreign currency forward and option contracts to mitigate the impact of currency rate fluctuations on firmly committed and projected future foreign currency transactions. These over-the-counter contracts, which hedge future currency requirements related to purchases of inventory, product sales, and other cross-border transactions not denominated in the functional currency of the business unit, are primarily denominated in United States, Canadian and Hong Kong dollars as well as Euros and British pound sterling.
All contracts are entered into with a number of counterparties, all of which are major financial institutions. The Company believes that a default by a single counterparty would not have a material adverse effect on the financial condition of the Company. Hasbro does not enter into derivative financial instruments for speculative purposes. Cash flow activity associated with the Company's derivative financial instruments is recorded within cash flows from operating activities on the Consolidated Statement of Cash Flows.
Cash Flow Hedges
All of the Company’s designated foreign currency forward contracts are considered to be cash flow hedges. These instruments hedge a portion of the Company’s currency requirements associated with anticipated inventory purchases, product sales and other cross-border transactions.
As of December 28, 2025 and December 29, 2024, the notional amounts and fair values of the Company’s foreign currency forward and option contracts designated as cash flow hedging instruments were as follows:
| 2025 | 2024 | ||||||||||||||||||||||
| (In millions) | Notional Amount | Fair Value | Notional Amount | Fair Value | |||||||||||||||||||
| Inventory purchases | $ | 199.9 | $ | (9.5) | $ | 131.5 | $ | 8.0 | |||||||||||||||
| Sales | 76.0 | 3.1 | 86.0 | (1.4) | |||||||||||||||||||
| Other | 35.4 | (0.7) | 22.8 | 0.9 | |||||||||||||||||||
| Total | $ | 311.3 | $ | (7.1) | $ | 240.3 | $ | 7.5 |
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
Undesignated Hedges
The Company also enters into foreign currency forward contracts to minimize the impact of changes in the fair value of intercompany loans due to foreign currency changes. The Company does not use hedge accounting for these contracts as changes in the fair values of these contracts are substantially offset by changes in the fair value of the intercompany loans. As of December 28, 2025 and December 29, 2024, the total notional amounts of the Company’s undesignated derivative financial instruments were $191.5 million and $289.6 million, respectively.
Fair Value Measurement
The Company has a master agreement with each of its counterparties that allows for the netting of outstanding forward contracts. The fair values of the Company’s foreign currency forward contracts are recorded in the Consolidated Balance Sheets as follows:
| Designated Hedges | Undesignated Hedges | ||||||||||||||||||||||
| (In millions) | 2025 | 2024 | 2025 | 2024 | |||||||||||||||||||
| Prepaid expenses and other current assets: | |||||||||||||||||||||||
| Unrealized gains | $ | 1.4 | $ | 9.1 | $ | 0.6 | $ | 1.9 | |||||||||||||||
| Unrealized losses | (0.7) | (1.1) | (0.2) | (0.2) | |||||||||||||||||||
| Net unrealized gains | $ | 0.7 | $ | 8.0 | $ | 0.4 | $ | 1.7 | |||||||||||||||
| Other assets: | |||||||||||||||||||||||
| Unrealized gains | $ | 1.2 | $ | — | $ | — | $ | — | |||||||||||||||
| Unrealized losses | (0.3) | — | — | — | |||||||||||||||||||
| Net unrealized gains | $ | 0.9 | $ | — | $ | — | $ | — | |||||||||||||||
| Accrued liabilities: | |||||||||||||||||||||||
| Unrealized gains | $ | 1.5 | $ | 0.5 | $ | — | $ | — | |||||||||||||||
| Unrealized losses | (9.5) | (1.0) | — | (1.2) | |||||||||||||||||||
| Net unrealized losses | $ | (8.0) | $ | (0.5) | $ | — | $ | (1.2) | |||||||||||||||
| Other liabilities: | |||||||||||||||||||||||
| Unrealized gains | $ | — | $ | — | $ | — | $ | — | |||||||||||||||
| Unrealized losses | (0.7) | — | — | — | |||||||||||||||||||
| Net unrealized losses | $ | (0.7) | $ | — | $ | — | $ | — |
Net gains (losses) on cash flow hedging activities have been reclassified from other comprehensive earnings (loss), net of tax, to net earnings as follows:
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Consolidated Statements of Operations Classification: | |||||||||||||||||
| Cost of sales | $ | (0.4) | $ | 2.1 | $ | (1.1) | |||||||||||
| Sales | 1.1 | (2.0) | 0.2 | ||||||||||||||
| Royalties and other | (0.5) | 0.2 | (2.2) | ||||||||||||||
| Net realized gains (losses) | $ | 0.2 | $ | 0.3 | $ | (3.1) |
In addition, the Company recorded net losses of $14.4 million and $3.3 million, and net gains of $23.4 million, on its undesignated derivative financial instruments for 2025, 2024 and 2023, respectively, relating to the change in fair value of such derivative financial instruments, substantially offsetting gains and losses from the change in fair value of intercompany loans to which the contracts relate. Such amounts are recorded within Other (income) expense, net within the Consolidated Statements of Operations.
For additional information related to the Company’s derivative financial instruments refer to Note 5, Other Comprehensive Earnings (Loss), and Note 15, Fair Value of Financial Instruments.
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
(20) Restructuring Actions
Starting in 2022, the Company implemented its Operational Excellence program ("the Program"), an ongoing enterprise-wide initiative intended to improve our business through programs that include targeted cost-savings, supply chain transformation and certain other restructuring actions designed to drive growth and enhance shareholder value. The Company's organizational structure changes have resulted and will further result in workforce reductions as well as the reallocation of people and resources. The Company currently anticipates that these changes will be substantially complete over the next three to six months.
Charges related to the Program were recorded in Selling, distribution and administration expense within Corporate and Other. Going forward, the Company may implement further cost-saving initiatives under the Program that could result in additional restructuring charges including severance and other employee charges.
The liability balance associated with Program related restructuring actions consisted of severance payments recorded within Accrued liabilities in the Consolidated Balance Sheets as follows:
| (In millions) | 2025 | 2024 | ||||||||||||
| Balance, beginning of year | $ | 46.9 | $ | 81.2 | ||||||||||
| Charges | 9.0 | 22.2 | ||||||||||||
| Payments | (36.6) | (56.5) | ||||||||||||
| Balance, end of year | $ | 19.3 | $ | 46.9 |
Total restructuring charges incurred to date under the Program as of December 28, 2025 equal $163.5 million.
(21) Commitments and Contingencies
The Company enters into license agreements with strategic partners, inventors, designers and others for the use of intellectual properties in its products. Certain of these agreements require the Company to pay fixed and determinable royalty amounts or nonrefundable licensing fees, regardless of future sales or performance. Under terms of existing agreements as of December 28, 2025, the Company is unconditionally obligated to make the following payments, net of amounts previously paid and recorded as prepaid royalties: 2026: $90.4 million; 2027: $112.0 million; 2028: $111.1 million; 2029: $110.7 million; 2030: $102.0 million; and thereafter: $100.8 million. Certain licensing agreements also include contingent minimum guarantees or performance-based payments that become payable only upon the occurrence of specified future events. Such contingent amounts are not included in the amounts above. As of December 28, 2025, the Company had $30.7 million of prepaid royalties, all of which are included in Prepaid expenses and other current assets.
Interest payment obligations on the Company's fixed-rate long-term debt are as follows: 2026: $153.9 million; 2027: $136.3 million; 2028: $119.7 million; 2029: $112.4 million; 2030: $77.3 million; and thereafter: $614.1 million. Refer to Note 12, Long-Term Debt and Other Financing, for additional information on the Company's long-term debt.
As of December 28, 2025, the Company estimates payments related to inventory and tooling purchase commitments may total approximately $111.6 million, excluding those already accrued in the Consolidated Balance Sheets.
The Company monitors for any estimated environmental contingencies related to its current physical locations and former owned or leased facilities which it is responsible for environmental matters. The Company has estimated a $30.5 million environmental liability related to a previously owned manufacturing facility (environmental liability assumed as part of a historical acquisition) in which the Company is solely responsible for the mitigation and remediation activities.
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
Legal and Other Claims
Hasbro is party to certain legal proceedings, as well as certain asserted and unasserted claims. Amounts accrued, as well as the total amount of reasonably possible losses with respect to such matters, individually and in the aggregate, are not deemed to be material to the consolidated financial statements.
The Company from time to time may be subject to lawsuits and other claims related to product, commercial, employee, environmental and other matters in the normal course of business. In determining costs to accrue related to these items, the Company carefully analyzes cases and considers the likelihood of adverse judgments or outcomes, as well as the potential range of possible loss. The Company accrues for matters when losses are both probable and estimable. Any amounts accrued for these matters are monitored on an ongoing basis and are updated based on new developments or new information as it becomes available for each matter.
(22) Segment Reporting
The Company's reportable segments are strategic business units that offer different products and services. They are managed separately because the business requires different technology and marketing strategies. The Company's reportable segments are as follows:
-
The Wizards of the Coast and Digital Gaming business engages in the promotion of the Company's brands through the development of trading card, role-playing and digital game experiences based on Hasbro and Wizards of the Coast games. Additionally, we license certain of our brands to other third-party digital game developers who transform Hasbro brand-based characters and other intellectual properties, into digital gaming experiences.
-
The Consumer Products segment engages in the sourcing, marketing and sales of toy and game products around the world. The Consumer Products business also promotes the Company's brands through the out-licensing of our trademarks, characters and other brand and intellectual property rights to third parties, through the sale of branded consumer products such as toys and apparel. Additionally, through license agreements with third parties, we develop and sell products based on popular third-party brands.
-
The Entertainment segment engages in the development and production of Hasbro-branded entertainment content including film, television, children’s programming, digital content and live entertainment focused on Hasbro-owned properties.
Corporate and Other, which does not meet the criteria to be an operating segment, provides management and administrative services to the Company's principal reporting segments described above and consists of unallocated corporate expenses and administrative costs and activities not considered when evaluating segment performance as well as certain assets benefiting more than one segment.
Segment performance is measured at the operating profit level. Intersegment sales and transfers are reflected in management reports at amounts approximating cost. Certain shared costs, including global development and marketing expenses and corporate administration, are allocated to segments based upon expenses and foreign exchange rates fixed at the beginning of the year, with adjustments to actual expenses and foreign exchange rates included in Corporate and Other. The accounting policies of the segments are the same as those referenced in Note
1, Summary of Significant Accounting Policies.
The chief operating decision maker ("CODM"), the Company's Chief Executive Officer, primarily uses the segments' operating profit or loss to allocate resources for each segment predominantly in the annual budget and forecasting process. The CODM considers budget-to-actual variances on a monthly basis when making decision about allocating resources to the segments. Results shown for fiscal years 2025, 2024 and 2023 are not necessarily those which would be achieved if each segment was an unaffiliated business enterprise. We do not present a measure of total assets for our reportable segments as this information is not used by the CODM to allocate resources and assess performance.
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
Information by segment and a reconciliation to reported amounts are as follows for fiscal year 2025:
| (In millions) | Wizards of the Coast and Digital Gaming | Consumer Products | Entertainment | Corporate and Other | Total | |||||||||||||||||||||||||||
| Revenues | $ | 2,405.7 | $ | 2,650.4 | $ | 125.4 | $ | 184.4 | $ | 5,365.9 | ||||||||||||||||||||||
| Less: Intersegment revenue | 218.8 | 212.8 | 48.6 | 184.4 | 664.6 | |||||||||||||||||||||||||||
| Total net revenues | 2,186.9 | 2,437.6 | 76.8 | — | 4,701.3 | |||||||||||||||||||||||||||
| Cost of sales | 370.9 | 917.2 | 6.6 | 1.5 | 1,296.2 | |||||||||||||||||||||||||||
| Program cost amortization | — | — | 35.8 | — | 35.8 | |||||||||||||||||||||||||||
| Royalties | 116.2 | 288.9 | (42.3) | 6.1 | 368.9 | |||||||||||||||||||||||||||
| Advertising | 124.0 | 193.0 | 0.7 | (0.8) | 316.9 | |||||||||||||||||||||||||||
| Amortization of intangible assets | 8.5 | 39.6 | 18.3 | (0.4) | 66.0 | |||||||||||||||||||||||||||
| Distribution (1) | 44.2 | 163.2 | — | 0.5 | 207.9 | |||||||||||||||||||||||||||
| Managed expense (2) | 516.3 | 1,778.3 | 57.3 | 46.6 | 2,398.5 | |||||||||||||||||||||||||||
| Operating profit (loss) | $ | 1,006.8 | $ | (942.6) | $ | 0.4 | $ | (53.5) | $ | 11.1 | ||||||||||||||||||||||
| Reconciliation to Loss before income taxes: | ||||||||||||||||||||||||||||||||
| Interest expense | 163.4 | |||||||||||||||||||||||||||||||
| Interest income | (28.6) | |||||||||||||||||||||||||||||||
| Other (income) expense, net | (21.7) | |||||||||||||||||||||||||||||||
| Loss before income taxes | $ | (102.0) |
(1) Distribution expenses consist of shipping and warehousing expense and is included in Selling, distribution and administration in the Consolidated Statement of Operations.
(2) Managed expenses consist of product development, selling and administrative expense, impairment of goodwill, and loss on disposal of business. Product development is included in Product Development in the Consolidated Statement of Operations. Selling and administrative expense is included in Selling, distribution and administration in the Consolidated Statement of Operations. Impairment of goodwill is included in the Impairment of goodwill in the Consolidated Statement of Operations. Loss on disposal of business is included in Loss on disposal of business in the Consolidated Statement of Operations. Managed expenses for the Consumer Products segment included a $1,021.9 million non-cash loss associated with the impairment of the reporting units within the Consumer Products segment. Refer to Note 8, Goodwill and Intangible Assets, for further information. Managed expenses for the Entertainment segment included a $25.0 million non-cash loss associated with the sale of the eOne Film and TV business.
Information by segment and a reconciliation to reported amounts are follows for fiscal year 2024:
| (In millions) | Wizards of the Coast and Digital Gaming | Consumer Products | Entertainment | Corporate and Other | Total | |||||||||||||||||||||||||||
| Revenues | $ | 1,666.0 | $ | 2,786.1 | $ | 132.6 | $ | 161.2 | $ | 4,745.9 | ||||||||||||||||||||||
| Less: Intersegment revenue | 154.7 | 242.2 | 52.3 | 161.2 | 610.4 | |||||||||||||||||||||||||||
| Total net revenues | 1,511.3 | 2,543.9 | 80.3 | — | 4,135.5 | |||||||||||||||||||||||||||
| Cost of sales (1) | 269.9 | 931.2 | 5.8 | (27.4) | 1,179.5 | |||||||||||||||||||||||||||
| Program cost amortization | — | — | 49.3 | — | 49.3 | |||||||||||||||||||||||||||
| Royalties | 42.3 | 297.3 | (58.5) | 3.1 | 284.2 | |||||||||||||||||||||||||||
| Advertising | 95.2 | 223.3 | 1.0 | — | 319.5 | |||||||||||||||||||||||||||
| Amortization of intangible assets | 8.2 | 44.5 | 15.3 | 0.3 | 68.3 | |||||||||||||||||||||||||||
| Distribution (2) | 31.4 | 165.7 | — | 2.1 | 199.2 | |||||||||||||||||||||||||||
| Managed expense (1) (3) | 432.3 | 766.6 | 69.0 | 77.6 | 1,345.5 | |||||||||||||||||||||||||||
| Operating profit (loss) | $ | 632.0 | $ | 115.3 | $ | (1.6) | $ | (55.7) | $ | 690.0 | ||||||||||||||||||||||
| Reconciliation to Earnings before income taxes: | ||||||||||||||||||||||||||||||||
| Interest expense | 171.2 | |||||||||||||||||||||||||||||||
| Interest income | (47.3) | |||||||||||||||||||||||||||||||
| Other expense (income), net | 69.1 | |||||||||||||||||||||||||||||||
| Earnings before income taxes | $ | 497.0 |
(1) During the year ended December 29, 2024, the Company recorded three non-recurring prior year adjustments: (i) a $31.1 million expense related to historical environmental liabilities that was recorded in managed expense, (ii) a $26.7 million benefit related to over-accrual of vendor commitment liabilities that was recorded in Cost of sales, and (iii) an $18.1 million benefit related to the reversal of stock compensation expense for the Company's performance stock awards that was recorded in managed expense within Corporate and Other. Refer to Note 1, Summary of Significant Accounting Policies, for further information. Items (i) and (ii) originally related to the Consumer Products segment; however, because the non-recurring nature of these adjustments are related to historical periods and not associated with the ongoing future
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
operations of the Consumer Products segment, the Company recorded the error corrections within Corporate and Other.
(2) Distribution expenses consist of shipping and warehousing expense and is included in Selling, distribution and administration in the Consolidated Statement of Operations.
(3) Managed expenses consist of product development, selling and administrative expense, and loss on disposal of business. Product development is included in Product Development in the Consolidated Statement of Operations. Selling and administrative expense is included in Selling, distribution and administration in the Consolidated Statement of Operations. Loss on disposal of business is included in Loss on disposal of business in the Consolidated Statement of Operations. Managed expenses for the Entertainment segment included a $37.4 million loss associated with the sale of the eOne Film and TV business.
Information by segment and a reconciliation to reported amounts are as follows for fiscal year 2023:
| (In millions) | Wizards of the Coast and Digital Gaming | Consumer Products | Entertainment | Corporate and Other | Total | |||||||||||||||||||||||||||
| Revenues | $ | 1,641.2 | $ | 3,171.1 | $ | 711.1 | $ | 187.2 | $ | 5,710.6 | ||||||||||||||||||||||
| Less: Intersegment revenue | 183.6 | 284.7 | 51.8 | 187.2 | 707.3 | |||||||||||||||||||||||||||
| Total net revenues | 1,457.6 | 2,886.4 | 659.3 | — | 5,003.3 | |||||||||||||||||||||||||||
| Cost of sales | 321.9 | 1,371.0 | 12.0 | 1.1 | 1,706.0 | |||||||||||||||||||||||||||
| Program cost amortization | 3.5 | — | 445.4 | — | 448.9 | |||||||||||||||||||||||||||
| Royalties | 57.4 | 315.0 | 55.8 | 0.1 | 428.3 | |||||||||||||||||||||||||||
| Advertising | 92.6 | 227.8 | 36.3 | 1.7 | 358.4 | |||||||||||||||||||||||||||
| Amortization of intangible assets | 7.7 | 53.3 | 21.4 | 0.6 | 83.0 | |||||||||||||||||||||||||||
| Distribution (1) | 28.2 | 197.2 | — | 0.2 | 225.6 | |||||||||||||||||||||||||||
| Managed expense (2) | 420.6 | 786.8 | 1,999.9 | 84.6 | 3,291.9 | |||||||||||||||||||||||||||
| Operating profit (loss) | $ | 525.7 | $ | (64.7) | $ | (1,911.5) | $ | (88.3) | $ | (1,538.8) | ||||||||||||||||||||||
| Reconciliation to Loss before income taxes: | ||||||||||||||||||||||||||||||||
| Interest expense | 186.3 | |||||||||||||||||||||||||||||||
| Interest income | (23.0) | |||||||||||||||||||||||||||||||
| Other expense (income), net | 7.0 | |||||||||||||||||||||||||||||||
| Loss before income taxes | $ | (1,709.1) |
(1) Distribution expenses consist of shipping and warehousing expense and is included in Selling, distribution and administration in the Consolidated Statement of Operations.
(2) Managed expenses consist of product development, selling and administrative expense, impairment of goodwill, and loss on disposal of business. Product development is included in Product Development in the Consolidated Statement of Operations. Selling and administrative expense is included in Selling, distribution and administration in the Consolidated Statement of Operations. Impairment of goodwill is included in the Impairment of goodwill in the Consolidated Statement of Operations. Loss on disposal of business is included in Loss on disposal of business in the Consolidated Statement of Operations. Managed expenses for the Entertainment segment included a $1,191.2 million non-cash loss associated with the impairment of the Family Brands and Film and TV reporting units and a $539.0 million non-cash loss associated with the sale of the eOne Film and TV business.
Other supplemental information by segment is as follows:
| (In millions) | 2025 | 2024 | 2023 | |||||||||||||||||
| Depreciation and intangible asset amortization: (1) | ||||||||||||||||||||
| Wizards of the Coast and Digital Gaming | $ | 17.6 | $ | 17.6 | $ | 27.8 | ||||||||||||||
| Consumer Products | 92.7 | 105.1 | 130.0 | |||||||||||||||||
| Entertainment | 19.8 | 16.7 | 28.5 | |||||||||||||||||
| Corporate and Other | 5.4 | 23.6 | 24.4 | |||||||||||||||||
| Total | $ | 135.5 | $ | 163.0 | $ | 210.7 | ||||||||||||||
| Additions to property, plant and equipment: | ||||||||||||||||||||
| Wizards of the Coast and Digital Gaming | $ | 12.9 | $ | 21.8 | $ | 48.7 | ||||||||||||||
| Consumer Products | 45.2 | 50.6 | 60.0 | |||||||||||||||||
| Entertainment | 0.1 | 0.1 | 0.4 | |||||||||||||||||
| Corporate and Other | 5.1 | 14.7 | 26.4 | |||||||||||||||||
| Total | $ | 63.3 | $ | 87.2 | $ | 135.5 |
(1) The amounts of depreciation disclosed by reportable segments are included within Cost of sales and Selling, distribution and administration. Intangible asset amortization is included within Amortization of intangible assets.
HASBRO, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements — (Continued)
Information as to Hasbro’s operations in different geographical areas is presented below on the basis the Company uses to manage its business. Net revenues are categorized based on the location of the customer, while long-lived assets are categorized based on their location. Principal international markets include Europe, Canada, Mexico and Latin America, Australia, China and Hong Kong.
Net revenue to external customers by geographic area were as follows:
| (In millions) | 2025 | 2024 | 2023 | ||||||||||||||
| United States | $ | 2,806.1 | $ | 2,599.8 | $ | 3,010.1 | |||||||||||
| International | 1,895.2 | 1,535.7 | 1,993.2 | ||||||||||||||
| Total | $ | 4,701.3 | $ | 4,135.5 | $ | 5,003.3 |
Long-lived assets, which represent property, plant and equipment, by geographic area were as follows:
| (In millions) | 2025 | 2024 | |||||||||
| United States | $ | 136.1 | $ | 185.9 | |||||||
| International | 111.7 | 116.7 | |||||||||
| Total | $ | 247.8 | $ | 302.6 |
Previous: Item 7A. Quantitative and Qualitative Disclosures About Market Risk. · Next: Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.